BUZZ-Defense contractor V2X gains as co poised to join S&P SmallCap index

Aerospace and defense contractor V2X Inc. shares were up 5% before the bell on Tuesday to $79.99 as the company was set to join the S&P SmallCap 600 index later this week.

V2X will replace Avanos Medical in the index before the bell on Friday, July 24, S&P Dow Jones Indices said.

Medical device maker Avanos is being taken private by American Industrial Partners in a $1.27 billion deal.

Stephens analyst Melissa Roberts said in a note she expects passive funds will need to buy 2.7 million V2X shares, implying nearly five days of purchasing demand.

Reston, Virginia-based V2X has about 31.3 million shares outstanding for a $2.4 billion market cap.

Through Monday, shares were up 40% year to date.

Of 12 analysts, the recommendation breakdown is eight "strong buy" or "buy", two "hold" and two "sell" ratings; the median price target is $80, according to LSEG data.