Kratos Defense & Security Solutions Inc. Stock Soars on New Contract and Rate Cut
Kratos Defense & Security Solutions Inc. (KTOS) shares reached new 52-week highs on Wednesday, fueled by a combination of factors. The company announced a significant contract award from the U.S. Air Force and benefited from broader market strength following the Federal Reserve's decision to cut interest rates.
The U.S. Air Force awarded Kratos a $79.8 million delivery order for 60 BQM-167A Air Force Subscale Aerial Targets, mission kits, flight consumables, and technical data. This contract, part of a five-year agreement, has the potential to reach a total value of $374.04 million if all options are exercised.
The BQM-167A received significant capability upgrades, enhancing its role in weapon systems verification and training efforts. This upgrade ensures the BQM-167A remains a relevant and affordable threat representative aircraft for years to come.
"As our nation’s peer threat countries continuously grow their capabilities in both technology and mass, our country must train our military and test our defenses against current, relevant, accurate, and representative threat systems,” said Steve Fendley, president of Kratos’ unmanned systems division.
Kratos shares have climbed nearly 9% over the past week. The broader market also experienced a boost after the Federal Reserve cut interest rates by 0.5%, bringing the target fed funds rate to a range of 4.75% to 5%. This marked the first rate cut since March 2020.
Kratos Defense shares reached a high of $23.97 on Wednesday before closing the session at $23.41, representing a 4.37% increase.