Why Kratos Defense Shares Are Falling Today

Shares of Kratos Defense and Security Solutions (NASDAQ: KTOS) traded down nearly 10% on Tuesday after the defense company was downgraded by J.P. Morgan. The stock has had a strong run over the past three months, and at least one analyst doesn't see it climbing much higher right now.

Kratos, which specializes in drones and defense electronics, got a lift back in late July when online news service Dealreporter suggested it as a potential acquisition target for Lockheed Martin (NYSE: LMT). Lockheed CEO James Taiclet had made comments suggesting his company could look for "pure play" defense companies that line up well with its existing capabilities, and Kratos would seem a natural fit.

Kratos' XQ-58A Valkyrie demonstrator drone. Image source: Kratos.

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Source Fool.com