As global tensions rise and nations ramp up their defense spending, defense and aerospace companies are poised to benefit from a new era of military modernization.
The defense and aerospace sector is attracting billions in new contracts for everything from cutting-edge fighter jets to advanced surveillance systems.
Here are 10 standout stocks that are strategically positioned to grow alongside the world’s evolving defense priorities. We’ll take a closer look at 3 stocks that analysts think are slightly undervalued today. These names are worth watching, whether you’re looking for stocks with stability, innovation, or long-term growth.
Northrop Grumman (NOC)
- Market Cap: $69 billion
- Industry: Aerospace and Defense
- Analyst Upside: 14%
- P/E Ratio: 17
Company Overview: Northrop Grumman is a global aerospace and defense company specializing in autonomous systems, cyber, space, and advanced weapons technologies.
Business Strategy: The company focuses on delivering innovative defense solutions to the U.S. government and international allies, emphasizing growth in space and cyber domains.
Recent Developments:
- Earnings & Profitability: Northrop’s profitability was pressured by accounting adjustments and cost issues related to the B-21 Raider, though the program remains on schedule.
- Business Growth Trends: The company reported a record backlog, driven by strong international demand, indicating robust future growth prospects.
- Shareholder Returns: NOC raised its quarterly dividend by 12%, continuing a long track record of dividend growth and signaling confidence in its long-term outlook.
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L3Harris Technologies (LHX)
- Market Cap: $43 billion
- Industry: Aerospace and Defense
- Analyst Upside: 11%
- P/E Ratio: 22
Company Overview: L3Harris Technologies is an American defense contractor that provides advanced communication systems, electronic warfare, and surveillance solutions in the air, land, sea, space, and cyber domains.
Business Strategy: The company aims to be the “Trusted Disruptor,” aiming to quickly deliver advanced technologies while maintaining strong relationships with defense customers.
Recent Developments:
- Earnings & Profitability: L3Harris reported solid first-quarter results, with revenue growth and improved operating margins.
- Business Growth Trends: The company continues to invest in next-generation technologies to meet evolving defense needs.
- Shareholder Returns: Management continues to engage in share repurchase programs, demonstrating a commitment to returning value to shareholders.
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Lockheed Martin (LMT)
- Market Cap: $112 billion
- Industry: Aerospace and Defense
- Analyst Upside: 10%
- P/E Ratio: 17
Company Overview: Lockheed Martin is a leading global security and aerospace company, known for its advanced technology systems, including the F-35 fighter jet, missile defense systems, and space exploration technologies.
Business Strategy: The company focuses on delivering 21st-century security solutions by investing in digital transformation, expanding international partnerships, and enhancing its global supply chain resilience to meet increasing demand and geopolitical requirements.
Recent Developments:
- Earnings & Profitability: Lockheed Martin achieved year-over-year sales growth and strong free cash flow in the first quarter, maintaining a positive financial outlook.
- Business Growth Trends: LMT has been accelerating efforts to establish stronger partnerships and production capabilities in Europe amid a European Union push to bolster local military manufacturing.
- Shareholder Returns: The company has consistently returned significant value to shareholders through a growing dividend and aggressive share repurchase program.
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TIKR Takeaway
As global tensions and security demands rise, defense and aerospace companies are seeing renewed investor interest.
Leaders like Northrop Grumman (NOC), L3Harris Technologies (LHX), and Lockheed Martin (LMT) could be undervalued today. However, they are well-positioned to benefit from increased government spending and long-term modernization programs.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
