Benchmark Reiterates Buy on Kratos Defense & Security Solutions

In a report published earlier, Benchmark reiterates a Buy rating on Kratos Defense & Security Solutions (NASDAQ: KTOS) and a price target of $8.

Benchmark notes, “Management expects the CEI acquisition to close in early July. We estimate CEI will add $50+ million in sales and $6 million in FCF. More importantly, we believe the acquisition will enable KTOS to expand into the next-generation UAV market. Most of the military's UAVs were developed and deployed quickly for Iraq and Afghanistan and are not suitable for more contested air environments in the future. With Kratos, CEI could develop a more stealth fighter-UAV with strike capabilities.”

Kratos Defense & Security Solutions closed at $5.72 on Wednesday.