Kratos Defense & Security Solutions (KTOS) stock surged 5.45% in pre-market trading following an analyst upgrade that cited strong growth potential from hypersonic technologies and missile demand.
Jefferies upgraded the defense contractor to "Buy" from "Hold," maintaining a price target of $85. The brokerage firm highlighted upside to the company's revenue outlook, driven by faster hypersonics growth, expanding missile propulsion opportunities, and steady demand for microwave electronics from defense programs.
The upgrade also pointed to rising production of Kratos's Valkyrie tactical drone, which is designed to fly alongside crewed fighter jets like the F-35, as a key growth driver that could lift revenues and profits above base expectations. Analyst Sheila Kahyaoglu noted that the "bull case is bolstered by missile demand," with the company benefiting from increased global military focus on autonomous systems and counter-drone technologies.
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