Kratos Defense & Security Solutions Inc shares hit new 52-week highs on Wednesday on what appeared to be continued strength from an U.S. Air Force award announced Tuesday.

The stock also got a boost from strength across broader markets following the Federal Reserve’s decision on rates.

What To Know: Kratos Defense shares reached new 52-week highs on Wednesday, a day after the stock traded higher as the company announced it received a $79.8 million delivery order for 60 aircraft, mission kits, flight consumables and technical data for the BQM-167A Air Force Subscale Aerial Target under a five-year contract.

If all options are exercised at the maximum production quantities, Kratos said the contract value could be as high as $374.04 million.

The award incorporates enhancements that include the largest capability upgrade to date for the BQM-167A. The increased capabilities are expected to improve weapon systems verification and training efforts the BQM-167A helps enable.

“As our nation’s peer threat countries continuously grow their capabilities in both technology and mass, our country must train our military and test our defenses against current, relevant, accurate, and representative threat systems,” said Steve Fendley, president of Kratos’ unmanned systems division.

“Kratos is proud its BQM-167A has been a part of this solution for over 20 years and of the GAPP upgrades which increase the capability and extend the relevance of this affordable threat representative aircraft for years to come.”

Kratos shares are up nearly 9% over the past week, according to data from Benzinga Pro. Several stocks initially popped Wednesday afternoon after the Fed cut rates by 0.5%. Small caps led the way, and the SPDR S&P 500 hit new all-time highs Wednesday afternoon before sliding into the close.

Wednesday's 0.5% rate cut brought the target fed funds rate to a new range between 4.75% and 5%, down from a 23-year high of 5.25% to 5.5%. It was also the first rate cut since March 2020.

KTOS Price Action: Kratos Defense shares traded as high as $23.97 on Wednesday before pulling back. The stock closed the session up 4.37% at $23.41, per Benzinga Pro.

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