Defense stocks are seeing a sharp rise in values as investors take note of pledges by the EU to boost defense spending following Russia’s invasion of Ukraine.
Defense contractors continued to gain as investors bet their businesses would benefit from the conflict.
Raytheon Technologies, the US defense giant and maker of the Stinger ground-to-air missile that Germany has pledged to supply to Ukrainian forces, has seen its shares price increase more than 10% since the invasion.
Lockheed Martin, the maker of the F-35 fighter jet, advanced more than 5.4% on Monday. The company, with Raytheon, is the manufacturer of the Patriot missile defense system set to be deployed with the Nato battlegroup in Slovakia.
Northrop Grumman, leading manufacturer of attack and surveillance drones, saw its stock rise close to 7% on Monday, after rising 3% since the Ukrainian conflict began.
Huntington Ingalls Industries, the largest US military shipbuilder, is up over 7%.
Britain’s BAE Systems, the largest defense contractor in Europe, Germany’s Rheinmetall, France’s Thales and Italy’s Leonardo have all seen their share prices rise sharply.
“If Germany is feeling pressure to bolster its military and defense systems in this way, other countries are likely to follow suit,” said Investor Place in a note. “This means that companies that produce military technology and weapons are likely to see a significant spike in demand throughout the coming months.
Defense contractors watch for signs that the Pentagon will ask Congress for additional funding to pay for increased costs, including the deployment of 7,000 US troops to Europe and the cost of additional surveillance flights.
“Russia’s actions in Ukraine have renewed the arguments for higher US defense spending and I think we’re likely to see it grow more than previously expected,” said Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies.
No comments:
Post a Comment