This analyst just trimmed his price target on Kraken Robotics

National Bank Financial analyst Mike Stevens says Kraken Robotics (Kraken Robotics Stock Quote, Chart, News, Analysts, Financials TSXV:PNG) still has a compelling setup after closing its $615-million acquisition of Covelya Group and updating its fiscal 2026 guidance.

As reported by The Globe and Mail, Stevens  lowered his target to $10.00 from $13 .00 to reflect lower near-term expectations.

The average target is $9.50.

The Mount Pearl, N.L.-based company, which makes sonar systems and underwater batteries for ships and submarines, also said it intends to uplist to the TSX by the end of 2026 or early 2027.

Stevens said Kraken’s updated fiscal 2026 guidance was slightly below consensus and his internal expectations, largely because of lower expected services revenue. He said an Acoustic Corer project has not yet materialized, while KATFISH has been removed from the services business because customer demand is focused on purchases rather than rentals.

On the Covelya side, Stevens said Sonardyne’s On-Demand Ocean Bottom Node program with Shell, Petrobras and SENAI CIMATEC is expected to pause in 2026 before commercial operations ramp in 2027.

As a result, the analyst now expects pro forma revenue growth closer to 20% year-over-year in fiscal 2026 before growth accelerates into the high-20% range in fiscal 2027, with revenue approaching $570-million.

“We’d consider this growth quite impressive at this scale,” Stevens said.

Stevens said Kraken’s valuation is now more attractive after the Covelya deal, moving to about 4.2 times EV/sales and 17.9 times EV/EBITDA on his fiscal 2027 estimates, down from 8.0 times and 30.4 times, respectively, as a standalone company.

“We believe this remains a compelling entry point for the shares,” Stevens said.

He said Covelya is a potentially transformational acquisition that roughly triples Kraken’s scale, diversifies its business and customer base, and lowers valuation risk.

“We continue to believe that the market is underappreciating the combined company’s scale, diversification improvements and future growth prospects, while maintaining a similar margin profile,” Stevens said.

Kraken shares are down 40% from their early March highs and trade at 17.9 times EV/EBITDA on Stevens’ fiscal 2027 estimates, which imply 31% pro forma Adjusted EBITDA growth.

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