Shares of Kratos Defense & Security Solutions (KTOS) soared 5.65% at market open on Monday, driven by a positive analyst action.
The surge follows an upgrade by Jefferies, which raised its rating on the defense contractor to "Buy" from "Hold" and maintained an $85 price target. The brokerage firm highlighted significant growth potential, citing faster hypersonics development, expanding opportunities in missile propulsion, and steady demand for microwave electronics from ongoing defense programs.
Jefferies also pointed to rising production of the company's Valkyrie tactical drone, a collaborative combat aircraft designed to operate alongside crewed fighter jets, as a key driver expected to lift revenues and profits above the company's base expectations. Analyst Sheila Kahyaoglu noted that the bullish case is bolstered by strong global missile demand, as militaries focus on autonomous systems and counter-drone technologies.
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