Investing.com - Stifel initiated coverage on Kratos Defense & Security (NASDAQ: KTOS ) with a Buy rating and a price target of $52.00 on Monday.

The research firm’s coverage initiation comes as Kratos continues to strengthen its position in the defense technology sector, with the company’s products gaining traction in various military applications.

Stifel’s price target of $52.00 is based on an approximately 27.5x multiple applied to $325 million in medium-term EBITDA, discounted back two years, according to the firm’s analysis.

The 27.5x multiple is consistent with Kratos’s average multiple over the last decade, reflecting the firm’s assessment of the company’s historical valuation patterns.

Stifel identified several potential downside risks to its investment thesis, including unexpected federal budget disruptions, rapid technological changes that could impact the utility of Kratos’s key products, and the emergence of new competitors in the defense technology space.

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