Karman Holdings Inc. (KRMN) has received a new Buy rating, initiated by William Blair analyst, Louie DiPalma.
Louie DiPalma’s rating is based on Karman Holdings Inc.’s strategic acquisition of MTI, which aligns with its goal of owning the supply chain. This acquisition enhances Karman’s capabilities in producing high-temperature resistant materials for missile systems, thereby strengthening its market position. Additionally, the acquisition is expected to positively impact Karman’s already impressive EBITDA margin, which is among the highest in the aerospace-defense sector.
Furthermore, Karman’s ability to adjust its contract terms for inflation in materials and labor costs provides a safeguard for its profit margins. The company’s consistent acquisition strategy, with seven acquisitions in the past four years, suggests a robust growth trajectory. With favorable industry conditions, the stock is anticipated to rise to a range of $40 to $45 within the next year, despite the risks associated with its premium valuation and reliance on U.S. Department of Defense contracts.
In another report released on April 2, RBC Capital also maintained a Buy rating on the stock with a $38.00 price target.