Baird reiterated its Outperform rating and Bullish Fresh Pick designation for Mercury Systems Inc. (NASDAQ: MRCY), maintaining a price target of $130. The firm’s outlook, set to expire on December 31, 2026, reflects confidence in the company’s execution and multi-year visibility, despite a recent stock pullback.
Mercury Systems’ shares closed at $91.36 on August 21, down 3.05% for the session and 19% over the past week. Pre-market trading showed a further decline to $90.65. The selloff followed the company’s fiscal fourth-quarter 2026 results, which included revenue of $289.8 million, exceeding Wall Street estimates by 6.1% on an organic basis.
Adjusted earnings per share came in at $0.37, slightly below the consensus estimate of $0.38. However, bookings surged 93.1% year-over-year to a record, while the total backlog reached $1.945 billion, up 38.4% from the prior year. Baird emphasized that the post-results decline does not align with the company’s operational strength or margin inflection trajectory.
Other analysts also revised their outlook. Piper Sandler raised its price target to $131 while maintaining an Overweight rating, and RBC Capital increased its target to $120 from $105, keeping an Outperform rating. Four analysts revised earnings estimates upward for the upcoming period.
Baird noted that its outlook does not account for potential follow-on awards tied to the CPA platform, a seven-year missile framework agreement, or the recent Palantir Technologies (PLTR) partnership. Investor concerns over margin pressures and the minor earnings miss contributed to the stock’s decline despite strong bookings growth.
