In a report released today, Ronald Epstein from Bank of America Securities reiterated a Buy rating on Leonardo Drs (DRS – Research Report), with a price target of $50.00.
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Ronald Epstein has given his Buy rating due to a combination of factors that highlight Leonardo DRS’s strategic positioning and growth potential. The company’s alignment with global defense modernization efforts, particularly in shipbuilding and advanced technology, is seen as a significant driver of future growth. DRS is expected to benefit from increased naval content and its involvement in the $150 billion budget reconciliation bill, which includes areas like counter-UAS, AI processing, and integrated missile defense.
Furthermore, Epstein notes DRS’s ability to adapt its core sensing capabilities to adjacent markets, such as integrating sensors into next-generation missile systems. This adaptability is anticipated to create additional demand and revenue streams. Additionally, DRS’s proactive investment in next-generation technology, reflected in a 40% year-over-year increase in internal research and development spending, aligns with U.S. government priorities for commercialized defense innovation, further supporting the Buy rating.