Kratos Defense initiated with a Buy at Stifel

Stifel initiated coverage of Kratos Defense (KTOS) with a Buy rating and $52 price target as part of a broader research note on Defense names. The company’s growth drivers are now diversified beyond Valkyrie tactical drones and the firm believes Kratos will see a steep ramp in sales and EBITDA, the analyst tells investors in a research note. The defense industry is changing as the government is forced to buy differently and more effectively given the rising threat of China, Stifel adds, noting that Kratos’ 200-lb thrust TDI-J85 turbine engine is a leading candidate on many of the leading proposed systems and a key enabler of affordable mass in the cruise missile application.