UPDATE: Jefferies Assumes Coverage on Kratos Defense & Security at Hold on Multiple Challenges Ahead

In a report published Monday, Jefferies analyst Sheila Kahyaoglu assumed coverage on Kratos Defense & Security KTOS with a Hold rating, and raised the price target from $5.00 to $7.10.

In the report, Jefferies noted, “We assume coverage with a HOLD rating. Our rating is based on the following: 1) Reported revenue growth slows as acquisition contribution winds down; 2) Margin expansion proves to be difficult; and 3) Financial leverage limits strategic flexibility. Progress with the following elements would have us re-visit our rating.”

Kratos Defense & Security closed on Friday at $7.04.