Executive Mosaic’s GovCon Index closed in the red to start 2025, sliding 0.39% to $4,819.09. Wall Street had a blockbuster year, but the expected boost from the Santa Claus rally did not happen. Thursday’s modest losses extended the post-Christmas slump of the Dow Jones Industrial Average (-0.36%), S&P 500 (-0.22%), and the Nasdaq Composite (-0.16%).
Mega-cap tech stocks, led by Apple (Nasdaq: AAPL), dragged the US stock benchmarks lower. Tesla (Nasdaq: TSLA) tanked -6.08% after reporting lower annual delivery of electric vehicles and not achieving its quarterly delivery targets in 2024. Constellation Energy (Nasdaq: CEG) popped +8.44% on news that the company signed deals with the US government, including a 10-year $840 million contract from the US General Services Administration to supply electricity from nuclear energy.
Rocky start
The GovCon Index failed to sustain its New Year’s Eve gain as decliners outnumbered advancers. CACI International (NYSE: CACI) and AeroVironment (Nasdaq: AVAV) raced out the starting gate to lead 21 gainers. Boeing (NYSE: BA) topped eight underperformers, while Kratos Defense & Security Solutions (Nasdaq: KTOS) settled on the flat line.
Financial services company Raymond James raised its price target for CACI to $475, citing a solid financial foundation and favorable growth prospects for the defense contractor. The potential upside is +16% from its current share price of $410.96.
AeroVironment bucked the broad market’s downward trend. Grand View Research believes that AVAV will benefit from the significant growth potential of the military drone sector. The market research and consulting firm forecasts a compound annual growth rate of about 14% from 2024 to 2030, from $36.1 billion in 2023.
Boeing tumbled 2.9% due to the recent 737-800 aircraft accident in South Korea. However, Scott Deuschle, an analyst at Deutsche Bank, raised the price target to $215 (+25%) and maintained a buy rating because of the improvement in production momentum.
Contract awards
The US Army awarded Northrop Grumman Systems of Northrop Grumman (NYSE: NOC) a $481.3 million hybrid firm-fixed-price and cost-plus-fixed-fee transaction agreement relating to updates and improvements to the Integrated Air and Missile Defense Battle Command System’s software.
Raytheon, a business unit of RTX (NYSE: RTX) recently secured a $31.2 million modification contract for the recertification and modernization of 257 Tomahawk Block IV All-Up-Round Missiles from the Naval Air Systems Command. It includes purchasing 24 Maritime Strike Tomahawk vertical launch systems and 11 MST missile capsule launch systems.
Market Summary
| Index | Price | Net Change | % Change |
|---|---|---|---|
| GovCon Index Daily Average | 4,819.09 | -18.76 | -0.39% |
| Dow Jones Industrial Average | 42,392.27 | -151.95 | -0.36% |
| NASDAQ | 19,280.79 | -30.00 | -0.16% |
Top 5 GovCon Index Daily Percentage Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| CACI | 410.96 | 6.90 | 1.71% |
| AVAV | 156.45 | 2.56 | 1.66% |
| MMS | 75.81 | 1.16 | 1.55% |
| MRCY | 42.32 | 0.32 | 0.76% |
| CG | 50.73 | 0.24 | 0.48% |
Top 5 GovCon Index Daily Net Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| CACI | 410.96 | 6.90 | 1.71% |
| AVAV | 156.45 | 2.56 | 1.66% |
| MMS | 75.81 | 1.16 | 1.55% |
| SAIC | 112.15 | 0.37 | 0.33% |
| MRCY | 42.32 | 0.32 | 0.76% |
Top 5 GovCon Index Daily Percentage Decliners
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| BA | 171.87 | -5.13 | -2.90% |
| PSN | 90.51 | -1.74 | -1.89% |
| LHX | 207.36 | -2.92 | -1.39% |
| ICFI | 117.92 | -1.29 | -1.08% |
| CW | 351.35 | -3.52 | -0.99% |
