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Investing.com - Stifel raised its price target on Kratos Defense & Security (NASDAQ:KTOS) to $112.00 from $70.00 on Wednesday, while maintaining a Buy rating on the defense contractor’s shares.
The 60% increase in price target comes as Kratos has introduced two new multidecade franchises in the past 60 days, expanding the company’s opportunity set in the defense market.
Stifel specifically highlighted the company’s Valkyrie drone program as becoming "more significant and certain," representing a major growth opportunity for Kratos.
The firm noted that last week’s demonstration of AI-enabled Valkyrie drones flying alongside manned Air Force fighters represents "a meaningful technical achievement" for the company’s autonomous systems.
While acknowledging potential near-term volatility in the stock, which has "gone vertical" in recent trading, Stifel advised investors to maintain positions in Kratos shares, stating it does not see any company-specific factors that would outweigh the benefits of a potential Valkyrie program award.
In other recent news, Kratos Defense & Security Solutions has been awarded a $175 million contract for the U.S. Navy’s AN/SPY-1 radar systems sustainment. This contract, known as "Project Anaconda," supports radar systems on Aegis-equipped cruisers and destroyers. Additionally, Kratos has completed the Preliminary Design Review for the Space Development Agency’s Advanced Fire Control Ground Integration system, progressing the program on an accelerated timeline. In analyst updates, Canaccord Genuity raised its price target for Kratos to $120 while maintaining a Buy rating. Conversely, B.Riley downgraded the stock from Buy to Neutral due to valuation concerns, despite increasing the price target to $105. Citizens JMP also raised its price target to $105, citing insights from the Miramar Air Show. These developments highlight Kratos’s ongoing projects and varying analyst perspectives on its stock valuation.
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