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Wall St Engine @wallstengine on x 73K followers
Created: 2025-07-18 10:37:33 UTC
Cantor Fitzgerald Reiterates Overweight Rating on $KTOS, Maintains PT at $60; 'we think this time market sentiment is under-appreciating the upside and sustainability '
Analyst comments: "While Kratos shares have rallied ahead of the expected X-58 service entry, we believe market sentiment is still underestimating both the upside and sustainability of KTOS’s growth trajectory. Unlike the 'winner-take-all' dynamics implied by the Collaborative Combat Aircraft (CCA) program, we view Group 4–5 drones as part of a broader array of service-branch solutions, with different platforms tailored to different missions. In this context, we are particularly optimistic about the X-58 as U.S. force structure shifts toward attrition-tolerant strategies.
Beyond drones, KTOS has strong potential to expand in microwave electronics and munitions, supported by work on higher-value systems and classified programs. Using our cash flow vs. catalyst framework, we expect near-term appreciation driven by catalysts, with cash flow gains materializing over the next three years as investments begin to scale. While the Air Force may ultimately dual-source CCA with General Atomics and Anduril, we expect the X-58 to find a strong fit with branches prioritizing attrition-lethality models. Overall, we believe Kratos is in the early innings of its growth story, with prior strategic investments positioning it to assume more Prime-like roles in the defense ecosystem."
Analyst: Colin Canfield
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