The best defense stocks boast long-term programs as well as footholds in emerging priorities for the U.S. and its allies, while the Russia-Ukraine war drags on.
Russia-Ukraine War Impacts Defense Stocks
Defense stocks surged following Russia’s invasion of Ukraine in February 2022. As that war persists and a nuclear threat grows, defense stocks are outperforming the broader stock market.
Defense stocks including NOC, LMT and RTX are very well-positioned to benefit from increased funding associated with nuclear missiles, analysts say.
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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Boeing (BA) is known for its commercial jets and it’s also a major player in the defense sector. Defense revenue totaled $26.54 billion in 2021, roughly 43% of Boeing’s overall revenue.
BA stock earns an IBD Composite Rating of 58, EPS Rating of 1 and RS Rating of 95, all out of a best-possible 99.
The relative strength line for this top defense stock has risen since October 2022 to a new high, according to MarketSmith analysis. A strong RS line shows a stock is outperforming the S&P 500 index. The rally for Boeing stock came after it forecast rising commercial jet deliveries.
Northrop’s B-21 stealth bomber. (U.S. Air Force)
In defense, Boeing makes the iconic B-52 bomber. Its legacy fighter jets, like the F/A-18 and F-15, have updates in the works.
Boeing is also building the T-7 Red Hawk trainer jets, the MQ-25 Stingray drone and the KC-46 tanker for the Air Force and Navy. Its P-8 Poseidon spy aircraft is proving popular with both the U.S. Navy and allied navies.
In the space realm, Boeing is building the Crew Space Transportation-100 Starliner, to ferry astronauts, as well as NASA’s Space Launch System, the most powerful rocket ever.
Both projects have seen…