Truist raises price target for Kratos Defense shares By Investing.com

Truist Securities raised the price target on Kratos Defense & Security (NASDAQ: KTOS) shares from $25.00 to $27.00 and maintained a Buy rating.

The adjustment comes after a recent meeting with the company’s management, including CEO Eric DeMarco and CFO Deanna Lund.

The company’s analyst supports the buy recommendation and emphasizes that Kratos Defense stands out in the defense sector among small to medium-sized companies through organic growth.

The analyst expects the company to exceed its long-term revenue growth model of 8-12% as it secures orders for unmanned tactical drones.

Kratos Defense’s growing involvement in the hypersonic, turbofan and turbojet engine markets is also seen as a strategic advantage. The expansion is expected to strengthen the company’s presence in the missile and small drone markets and contribute to its growth prospects.

In other recent news, Kratos Defense & Security is in the spotlight due to several significant developments. The company exceeded second quarter financial guidance with revenue of $300.1 million and calculated EBITDA of $29.9 million.

In addition, Kratos secured a $79.9 million contract from the U.S. Air Force for the improvement and procurement of unmanned aerial targeting systems, which could reach a total value of $374 million if all options are exercised.

Analysts at BTIG maintained a neutral rating on the company’s stock, focusing on the potential financial impact should Kratos win a contract for the Collaborative Combat Aircraft (CCA) tactical drone program.

Meanwhile, Baird analysts raised their price target on Kratos shares to $35 from $22 and maintained an Outperform rating based on promising growth opportunities for the Valkyrie and Firejet platforms.

Kratos also completed a series of ground tests for a new turbofan engine in partnership with GE Aerospace, a development that received a buy recommendation from a benchmark analyst.

The company is expanding its drone manufacturing capabilities and investing in new launch capabilities for the Valkyrie system, with plans for further expansion in Oklahoma. Shield AI demonstrated the ability of its Hivemind AI pilots to autonomously pilot multiple Kratos MQM-178 Firejet aircraft, representing a significant advancement in autonomous aviation technology.

InvestingPro Insights

Truist Securities’ recent increase in the price target for Kratos Defense & Security (NASDAQ:KTOS) to $27.00 is backed by strong growth prospects and strategic market positioning. InvestingPro Tips highlights that Kratos holds more cash than debt on its balance sheet and net income is expected to grow this year. These factors contribute to the company’s financial resilience and potential for future expansion.

InvestingPro data provides further insights into the company’s valuation and performance. With a market capitalization of approximately $3.48 billion, Kratos trades at a high earnings multiple, with a price-to-earnings ratio of 321.39. The company’s revenue growth has been robust, recording an increase of 16.46% over the trailing twelve months to the second quarter of 2024. In addition, Kratos has delivered strong returns over the past year, with a total return of 58.82%.

For readers seeking additional insight, additional InvestingPro Tips are available that dive deeper into the company’s valuation metrics and performance indicators. These tips can provide valuable perspective for investors considering Kratos Defence & Security as part of their investment portfolio.

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