** Shares of U.S. Aerospace and defense companies AeroVironment AVAV.O, Karman Holdings KRMN.N and Kratos Defense & Security Solutions KTOS.O all up ~1% in premarket trading
** RBC Capital Market raises PT on AVAV to $275 from $200, KRMN to $51 from $44, and KTOS $50 from $38
** Brokerage says small-cap defense tech firms are likely to keep outperforming, helped by higher FY26 defense spending and strong positions in fast-growing markets like AI and missiles
** RBC expects FY26 U.S. defense spending growth and a shift to cheaper, disruptive tech benefiting small-cap defense firms over larger contractors
** Up to last close, AVAV, and KTOS stock had risen ~60% and ~64% respectively, and KRMN had fallen ~10.2% YTD
Companies | Rating | Current PT | Previous PT |
AeroVironment, Inc | Outperform | $275 | $200 |
Ducommun Inc | Outperform | $95 | $72 |
Karman Holdings Inc | Outperform | $51 | $44 |
Kratos Defense & Security Solutions Inc | Outperform | $50 | $38 |
Sector Perform | $55 | $50 |
(Reporting by Akriti Shah in Bengaluru)
((akriti.shah@thomsonreuters.com))