The best defense stocks boast long-term programs as well as footholds in emerging priorities for the U.S. and its allies, amid the Russian invasion of Ukraine.
Russia-Ukraine War Impacts Defense Stocks
Defense stocks surged following Russia’s invasion of Ukraine in February. They’re struggling now along with the broader stock market.
The U.S. and its European allies are spending billions in military aid for Ukraine. They are sending weapons such as the Lockheed Martin (LMT) Javelin anti-tank missiles and Raytheon (RTX) Stinger air-defense systems.
Longer term, the Ukraine war could mean big increases in military spending as well.
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Northrop Grumman Stock
Northrop Grumman (NOC) revenue totaled $35.67 billion in 2021.
Shares of the IBD Leaderboard stock broke out to highs in early June, then plunged. NOC stock has formed a new double-bottom base with a 487.99 buy point. It sat 2% below the entry Aug. 5 but above support at the 10-week moving average. The rising relative strength line for Northrop stock remains not far from highs, according to MarketSmith analysis.
NOC stock has an IBD Composite Rating of 90 and an EPS Rating of 72.
Northrop’s B-21 stealth bomber. (U.S. Air Force)Northrop makes the B-2 stealth bomber and will make the next-gen B-21 stealth bomber as well. The B-21s could eventually replace B-2s as well as Cold War-era B-52s.
The defense company is a major subcontractor on Lockheed’s F-35 program and also produces drones such as the Global Hawk. Meanwhile, its purchase of Orbital ATK boosted its space offerings.
In addition, Northrop Grumman is developing the U.S. Air Force’s next-gen intercontinental ballistic missile system, called Sentinel.
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Lockheed Martin Stock
Lockheed Martin generated revenue of $67 billion in 2021.
Lockheed stock jumped in early August to regain the 10-week average, after reclaiming the 40-week line in late July. The RS line for LMT stock has rallied this year and continues just below highs….