Benchmark analyst Josh Sullivan says Kratos (KTOS) has "long held the dominate position" in high-performance low-cost jet drones, aka Collaborative Combat Aircraft, or CCA, and notes that the FY24 Air Force budget is requesting $500M for CCA and $5.8B over the next five years. The transformative effect of CCA on air combat and large industrial base "dictates the political apparatus of a large defense prime creates advantages," said the analyst, who points to Northrop Grumman (NOC) as the only Skyborg participant without a true low-cost airframe. The firm, which contends that a Kratos-Northrop drone team "would create a formidable CCA player checking all the boxes neither could do alone," keeps a Buy rating and $20 price target on Kratos shares.
Published first on TheFly
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