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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 Airbus’s recent announcement of a partnership with Kratos to deliver a Valkyrie-based drone to the German Air Force, according to Stifel.
The firm also cited an AviationWeek report indicating that a new version of the Valkyrie drone will transition into a program of record for the U.S. Marines, marking significant progress toward full-scale production for the Valkyrie platform.
Stifel has upgraded its outlook for Kratos’s Valkyrie drone program, now including an incremental $75 million in EBITDA in its base earnings estimate, bringing the total base EBITDA assumption to $400 million.
The firm also raised its valuation multiple from 30x to 32x to reflect Kratos’s diversifying growth drivers in the defense sector.
In other recent news, Kratos Defense & Security has seen significant developments that are drawing attention from investors. Stifel has raised its price target for Kratos to $70, citing advancements in the Valkyrie drone program, including a partnership with Airbus for the German Air Force and a new program of record with the U.S. Marines. This has led to an increase in Stifel’s base earnings estimate for Kratos by $75 million in EBITDA. Meanwhile, Cantor Fitzgerald maintains an Overweight rating and a $60 price target, emphasizing Kratos’s growth potential in the X-58 drone program and its expansion into microwave electronics and munitions markets.
Raymond (NSE:RYMD) James also reiterated a Strong Buy rating with a $40 price target, following confirmation that the U.S. Marine Corps will move the Valkyrie drone into production. Additionally, Kratos, in collaboration with Intelsat, successfully demonstrated an end-to-end 5G satellite network, showcasing its capability to integrate terrestrial and space networks. This test represents a milestone in extending 5G connectivity beyond terrestrial coverage, potentially providing broadband services to underserved locations. These developments reflect Kratos’s diversifying growth drivers and its strategic positioning in the defense and technology sectors.
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