This analyst just raised his price target on Kraken Robotics

Benoit Poirier of Desjardins Securities resumed coverage of Kraken Robotics (Kraken Stock Quote, Chart, News, Analysts, Financials TSXV:PNG) with a “Buy” rating and raised his price target to C$14.00 from C$9.50, citing the company’s proposed acquisition of Covelya Group Limited.

“We view the Covelya acquisition positively as it transforms Kraken into a globally scaled, dual-use subsea platform company, broadening its offering and positioning it as a one-stop supplier to unmanned OEMs,” Poirier said. “The deal expands TAM, triples manufacturing capacity, deepens customer entrenchment, reduces concentration risk and preserves profitability.”

Earlier this month, St. John’s-based Kraken announced plans to acquire Covelya for C$615-million, including C$480-million in cash and C$135-million in Kraken shares, with part of the cash portion expected to be financed through a C$350-million public offering of subscription receipts.

Covelya is a global provider of underwater technology solutions through subsidiaries including Sonardyne International, EIVA, Forcys, Wavefront Systems, Voyis Imaging and Chelsea Technologies. The U.K.-based company operates 12 facilities worldwide with roughly 750 employees and is expected to generate C$249-million to C$275-million in revenue in 2025.

Kraken said the combined company would have pro forma 2025 revenue of about C$365-million and an Adjusted EBITDA margin of roughly 24%.

As reported by the Globe and Mail, Poirier said the acquisition significantly broadens Kraken’s total addressable market and strengthens its position in defence and maritime surveillance, particularly as demand rises for unmanned underwater systems.

He added that the deal could deepen relationships with major defence technology customers, including Anduril Industries, while allowing the combined company to deliver more integrated subsea systems spanning navigation, communications, imaging and power.

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