Kratos Defense & Security price target raised to $70 from $40 at JMP

Investing.com - Citizens JMP raised its price target on Kratos Defense & Security (NASDAQ:KTOS) to $70.00 from $40.00 while maintaining a Market Outperform rating.

The firm’s revised price target implies a CY26E EV/EBITDA multiple of 72.0x, representing approximately a 160% premium to the unmanned aerial systems and aerospace/defense peer group mean multiple of 27.7x. The company’s current EV/EBITDA multiple stands at 134.33x, with a P/E ratio of 463.35x, reflecting premium valuations that InvestingPro analysis suggests may be stretched relative to Fair Value.

JMP believes this premium valuation is warranted given Kratos’ growth drivers across established and emerging defense markets, where the company has a first-mover advantage.

The firm also cited geopolitical tailwinds supporting a production capability ramp across Kratos Government Services and Unmanned Systems offerings.

Kratos Defense & Security currently trades at a CY26E EV/EBITDA multiple of 59.8x, according to JMP’s analysis.

In other recent news, Kratos Defense & Security has been in the spotlight with several notable developments. Stifel has raised its price target for Kratos to $70, up from $54, while maintaining a Buy rating. This adjustment follows Airbus’s announcement of a partnership with Kratos to deliver a Valkyrie-based drone to the German Air Force. Additionally, a new version of the Valkyrie drone is set to transition into a program of record for the U.S. Marines, signaling a move toward full-scale production. Stifel’s updated outlook for Kratos includes an incremental $75 million in EBITDA, bringing the total base EBITDA assumption to $400 million.

Meanwhile, Cantor Fitzgerald has maintained its Overweight rating and a $60 price target on Kratos, citing the company’s potential in the X-58 drone program and expansion in microwave electronics and munitions markets. Raymond (NSE:RYMD) James reiterated its Strong Buy rating with a $40 price target, following confirmation that the XQ-58 Valkyrie will enter production as a Program of Record for the Marine Corps. In another development, Kratos successfully demonstrated an end-to-end 5G Non-Terrestrial Network in collaboration with Intelsat, showcasing the integration of satellite and terrestrial 5G networks. This demonstration represents a milestone in advancing 5G connectivity, potentially providing broadband services to underserved areas.

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