Wedbush initiated coverage on Kratos Defense & Security Solutions (KTOS) with an Outperform rating. Analyst Sam Brandeis established an $85 price target for the company.
Brandeis contends the market overlooks the firm's strategic position as a merchant arms supplier. Kratos provides engines, software, and hypersonic vehicles to nearly every major U.S. defense contractor.
This picks-and-shovels model allows the company to secure content in space, missile defense, and microelectronics. The strategy generates revenue regardless of which primary contractor wins a specific platform competition.