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Investing.com - Stifel raised its price target on Kratos Defense & Security (NASDAQ:KTOS) to $70.00 from $54.00 on Monday, while maintaining a Buy rating on the stock.
The price target increase follows two significant developments for Kratos’s Valkyrie drone program. Last week, Airbus announced a partnership with Kratos to deliver a Valkyrie-based drone to the German Air Force.
A day after the Airbus announcement, Aviation Week reported that a new version of the Valkyrie will transition into a program of record for the U.S. Marines, establishing a path to full-scale production for the drone.
Stifel has upgraded its outlook for Kratos’s Valkyrie drone program, including an incremental $75 million in EBITDA in its base earnings estimate. The firm’s higher price target reflects an increased base EBITDA assumption of $400 million.
The research firm also raised its multiple from 30x to 32x to account for Kratos’s diversifying growth drivers in the defense sector.
In other recent news, Kratos Defense & Security has been the focus of several significant developments. The company announced that the U.S. Marine Corps will transition the XQ-58 Valkyrie drone into a Program of Record, moving it into production, which Raymond (NSE:RYMD) James believes will positively impact Kratos’ future financial forecasts. In addition, Kratos successfully demonstrated an end-to-end 5G Non-Terrestrial Network in collaboration with Intelsat, marking progress in extending 5G connectivity via satellite.
Analyst firms have also shown confidence in Kratos’ future. Cantor Fitzgerald reiterated its Overweight rating and $60 price target, citing growth opportunities in the X-58 drone program and microwave electronics. Similarly, Noble Capital raised its price target to $60, highlighting abundant growth opportunities and a recent capital raise that positions Kratos for expansion in both defense and commercial sectors. These developments suggest a positive outlook for Kratos as it continues to advance its technological capabilities and expand its market presence.
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