Several space and defense technology companies’ stocks moved sharply higher after KeyBanc Capital Markets initiated coverage across the group, as investors reacted to bullish long-term growth commentary and newly established price forecasts tied to defense modernization and the expanding commercial space economy.
KeyBanc analyst Michael Leshock said Space & Defense Technology could emerge as one of the strongest growth segments within Aerospace & Defense over the next decade.
He pointed to elevated geopolitical tensions, rising global defense budgets, and a rapid evolution in warfare, particularly in drones, AI-enabled systems, and missile defense initiatives such as “Golden Dome.”
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Leshock also expects the commercialization of space to broaden demand across launch services, lunar missions, satellite manufacturing, and defense-linked data applications.
While constructive on the sector’s structural tailwinds, he emphasized a selective approach, favoring companies with clear catalysts and durable exposure to high-priority end markets.
KeyBanc’s Ratings And Price Forecasts At A Glance
KeyBanc initiated Overweight ratings on Karman Holdings Inc. (NYSE:KRMN), AeroVironment, Inc. (NASDAQ:AVAV), Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), and Intuitive Machines, Inc. (NASDAQ:LUNR), while assigning Sector Weight ratings to Firefly Aerospace Inc.(NASDAQ:FLY) and Redwire Corporation (NYSE:RDW).
The coverage reflects varying degrees of execution risk, valuation, and exposure to near-term program momentum.
Karman Holdings: Missile, Rocket, And Drone Exposure Drives Upside
Leshock initiated coverage of Karman Holdings with an Overweight rating and an $80 price forecast, compared with shares at $64.94 at the time of initiation. He highlighted the company’s exposure to missiles, rockets, and drones, as well as its growing role across both defense and space programs.
The analyst expects post-IPO price discovery to support further upside, with the valuation based on approximately 54x blended 2026E and 2027E EV/EBITDA. Leshock said the premium multiple reflects Karman’s high-growth profile and limited public trading history.
KRMN shares were up 5.38% at $71.77 at the time of publication on Friday, according to Benzinga Pro data.
AeroVironment: Margin Strength And BlueHalo Deal Support Premium Valuation
KeyBanc initiated AeroVironment at Overweight with a $285 price forecast, versus shares at $229.10. Leshock cited strong margins, backlog visibility, and a differentiated defense-technology portfolio as key drivers.
He said the BlueHalo acquisition adds scale in advanced counter-UAS systems, reinforcing AeroVironment’s positioning in next-generation defense technologies. The stock trades near 28x EV/EBITDA, with the price forecast implying roughly 34x blended EV/EBITDA, a valuation Leshock views as justified by consistent execution.
AVAV shares were last up 4.30% at $240.61.
Kratos Defense: Golden Dome And Hypersonics Fuel Growth Outlook
Leshock initiated Kratos Defense & Security with an Overweight rating and a $90 price forecast, compared with shares at $69.77. He pointed to Kratos’ leverage to Golden Dome, hypersonics development, and collaborative combat aircraft programs.
The valuation is anchored at roughly 8.5x blended 2026E and 2027E price-to-sales, above historical levels. However, Leshock said the premium is supported by a structural shift toward advanced defense technologies.
KTOS shares were last up 4.66% at $74.73.
Firefly Aerospace: Early Traction Offset By Execution Risk
KeyBanc assigned Firefly Aerospace a Sector Weight rating, balancing early spacecraft traction against execution and timing risks. Leshock said launch cadence and program schedules remain key variables for the company.
Firefly shares trade around 5.5x price-to-sales, below peers trading in a range of roughly 5x to 15x. The discount reflects uncertainty around cash flow generation and future capital requirements.
FLY shares surged 19.13% to $23.91.
Intuitive Machines: Lunar Leadership And Backlog Growth In Focus
Leshock initiated Intuitive Machines (NASDAQ:LUNR) at Overweight with a $20 price forecast, versus shares at $10.21. He highlighted the company’s leadership position in lunar services and its expanding backlog.
The stock trades near 3.4x price-to-sales, with the price forecast implying approximately 6.3x. Leshock expects operational improvements and additional contract awards to support scaling over time.
LUNR shares were last up 32.72% at $14.40.
Redwire: Integration And Profitability Execution Remain Key
KeyBanc initiated Redwire Corp (NYSE:RDW) with a Sector Weight rating, citing broad exposure across space and defense markets. Leshock said the Edge Autonomy acquisition adds scale, but upside depends on successful integration and execution toward sustained profitability.
Shares trade in the middle of Redwire’s historical 1x to 4x price-to-sales range, reflecting a balanced risk-reward profile.
RDW shares were last up 13.68% at $7.980.
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