106%+ returns, 97% win rate: A fresh list of AI-picked stock is out NOW
Investing.com - Goldman Sachs upgraded Kratos Defense & Security (NASDAQ:KTOS) from Neutral to Buy and established a $52.00 price target.
The investment bank cited Kratos’s strategic investments in defense supply chain areas that are "critical to the future of warfare" and at an "inflection point" as key reasons for the upgrade.
Goldman Sachs highlighted that funding is now materializing for drone programs, while turbo jet and turbo fan engines are experiencing high demand for unmanned aerial systems and missile systems.
The firm noted that both C5ISR (Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance and Reconnaissance) and space sectors continue to grow rapidly, areas where Kratos has established strong positioning.
Goldman Sachs expects significant revenue growth for Kratos over the medium term, which should lead to expanding profit margins and improved cash generation as the defense industrial base undergoes rebuilding.
In other recent news, Kratos Defense & Security Solutions has announced a significant $500 million primary equity share offering. This move is expected to fund investments and capital expenditures related to national security programs, strategic acquisitions, and general corporate purposes, including debt reduction. The company has filed an effective shelf registration statement with the Securities and Exchange Commission to facilitate this offering. Notably, underwriters have a 30-day option to purchase an additional $75 million in shares.
Truist Securities has raised its price target for Kratos Defense to $52, up from $38, maintaining a Buy rating. This adjustment follows Kratos’ announcement of new capital projects, with over $200 million earmarked for new opportunities and recent program wins. Truist’s analysis suggests these projects could add more than $150 million in revenue for Kratos in the coming years. Meanwhile, Stifel has also maintained its Buy rating and $52 price target, highlighting the company’s potential for incremental investments. Baird, RBC Capital Markets, Truist Securities, and Raymond (NSE:RYMD) James are acting as joint book-running managers for the offering, which is subject to market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.