This morning, Wells Fargo analyst Ed Caso upgraded CACI (CACI), Leidos (LDOS) and SAIC (SAIC) to Outperform from Market Perform while reiterating Outperform ratings on Booz Allen (BAH) and CSRA (CSRA), citing better fundamentals and the potential for the group to be meaningful beneficiaries of a reduction in the U.S. corporate tax rate.

GOOD PERFORMERS IN UNCERTAIN TIMES: In a research note to investors Wells Fargo's Caso upgraded CACI, Leidos and SAIC to Outperform from Market Perform, while reiterating Outperform ratings on Booz Allen and favorite idea CSRA. The analyst cited improving fundamental backdrop for funding levels and pricing, expected resolution in December of the 2018 federal government appropriations, stronger than normal GFQ4 book-to-bill expected, meaningful valuation, underperformance relative to aerospace/defense "primes," and the defensive nature of the shares. Additionally, Caso told investors that he sees potential for them to be meaningful beneficiaries of a reduction in the U.S. corporate tax rate given most are now essentially marginal tax payers. Overall, he pointed out that government service providers perform better when economic uncertainty rises. So, if the current extended rally in the stock market takes a breather, the group should outperform, he contended. The analyst raised his price target for CACI to $158 from $132, for Leidos to $69 from $58 and for SAIC to $80 from $70.

PRICE ACTION: In late morning trading, shares of CACI and CSRA are up 1% each and Leidos' stock has gained 2%, while Booz Allen is fractionally lower. "Trump Effect" is The Fly's recurring series of exclusive stories that highlight stocks that are being impacted, or are predicted to be impacted, by the comments, actions and policies of President Trump and his administration.