This Small Defense Stock Is Soaring on a New Buy Rating. It’s ‘Just the Beginning.’

V2X shares are up 22% this year. (Dreamstime)

Infantry wins battles, logistics win wars, or so the saying goes. V2X , a provider of supply and logistics services to the U.S. military, is emerging as a strong name in the operations side of the defense sector, according to BofA Securities.

Formed in 2014, V2X provides training, supply chain management, communications, and repair services to the Army, Navy, Air Force, and other organizations. Earlier in August, V2X announced a $4.3 billion contract to support the U.S. Air Force’s T-6 aircraft. It won the contract from JPATS Logistics Services.

Citing that contract, BofA Securities analyst Mariana Perez Mora on Wednesday upgraded shares of the firm from Hold to Buy and boosted her price target from $55 to $65.

The bullish call was helping shares. V2X stock closed up 10.4% at $60.17. The S&P 500 and Dow Jones Industrial Average rose 0.3% and 1%, respectively.

“We see V2X’s recent contract takeaway as a sign of its ability to win in its core logistics and operations and maintenance work,” wrote Perez Mora.

The win is “just the beginning,” the analyst added. “V2X is also winning awards to move up the food chain and take part in higher-growth, higher-margin work. We think this combination will result in accelerating and sustainable growth in the years to come and, thus, [valuation] re-rating.”

Her price target values V2X at about 9 times estimated 2026 earnings before interest, taxes, depreciation, and amortization, or Ebitda, up from her prior target of 8 times. Shares trade for roughly 8.4 times today.

The company has a market capitalization of $1.73 billion, according to FactSet.

The average analyst price target for V2X stock is about $64, according to FactSet.

Overall, 73% of the analysts who cover the company rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

Write to Al Root at allen.root@dowjones.com