Top 11 U.S. defense stocks chosen by analysts

In this article, we take a look at the top 11 U.S. defense stocks to buy, as selected by analysts. If you would like to skip articles about the latest happenings in the defense sector and the top weapons and companies, please visit the following links: Top 5 U.S. defense stocks to buy, according to analysts.

The defense industry is not a very glamorous field, despite the abundance of footage of F-16s firing missiles. Defense companies produce all kinds of weapons and combat equipment, both lethal and non-lethal. From Lockheed Martin Corp.’s (NYSE:LMT) fourth-generation fighter jets like the F-16 to Superior Group of Companies’ (NASDAQ:SGC) military uniforms, each product is designed to serve as a fighting machine no matter the situation. plays an important role in maintaining the About peace or war.

However, when we talk about pure defense stocks, these refer to companies that manufacture weapons or provide services directly to the military. From bullets to missiles, defense stocks benefit from having a stable customer: governments. So while companies like Apple Inc. (NASDAQ:AAPL) and Microsoft Inc. (NASDAQ:MSFT) are subject to the whims of their customers, there are companies like Boeing Inc. (NYSE:BA) and Northrop Grumman Corporation (NYSE:NOC) need to maintain existing stockpiles as well as stay on top of the latest developments in high-tech industries such as materials science and materials science. I recognize that I need to. Aerospace engineering is essential.

After a brief period of stability following the US withdrawal from Afghanistan, Russia invaded Ukraine in 2022, plunging the world back into war. Since then, the invasion of Ukraine has not only endured, but also brought the Eastern European country face-to-face with one of its largest armies. Conflicts are increasing around the world, and conflicts are also increasing in the Middle East. 2024 saw the first American death in the Middle East since the attack on Israel.

When talking about defense stocks, a common refrain is that defense companies’ stock prices will skyrocket as soon as there is a war that might involve their equipment (thus creating demand). (In other words, investors brace for growth.) For U.S. defense stocks, this argument stood the test of time at the beginning of the Russian invasion. As an example, consider the stocks of Lockheed Martin Corp. (NYSE: LMT) and Northrop Grumman Corp. (NYSE: NOC), two of his largest near-pure defense stocks in the United States.

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After the Russian invasion began on February 24, 2022, Lockheed’s stock price soared more than 19% over the next two weeks, before losing all its gains over the next seven months. The stock price soared in the weeks that followed, rising 6% since the start of the fighting and the Hamas attack.

Similarly, Northrop’s stock price soared in late February and October after falling 4% earlier this year following the company’s earnings report. This report covers Northrop Grumman Corporation’s (NYSE:NOC) fourth quarter and full year 2022 earnings, showing that the U.S. defense stock’s revenue share and sales increased by 25% and 16%, respectively. I did. However, the stock fell as Wall Street was unimpressed with the 30% decline in full-year net income.

U.S. defense stocks remain at the top of the global food chain, even if they periodically experience some turmoil. As an example, consider our coverage. Top 20 most valuable defense companies in the world. Four of the top five most valuable defense stocks on this list were from the United States. In addition to Lockheed and Boeing, the top four defense stocks included Charlotte, Carolina-based conglomerate Honeywell International Inc. (NASDAQ:HON) and missile manufacturer RTX Corporation (NYSE:RTX).

But what about Wall Street? After all, if investment banks and hedge funds are such savvy masters, they must have some uncanny ability to “sense” when the fortunes of U.S. defense stocks are rising. . Now, we’ll find out if investment bank Goldman Sachs Group (NYSE:GS) was thinking ahead when adjusting its investment portfolio in the second quarter of 2023. We looked at Goldman Sachs’ portfolio of defense and aerospace stocks.Some of our coverage Goldman Sachs Defense Stocks: Top 10 Stocks to Watch.

For reference, during the second quarter of 2023, Russia’s invasion of Ukraine marked its one-year anniversary, and a Hamas attack was imminent. During this period, Goldman Sachs’ top five defense stock picks were all U.S. defense stocks, but Goldman Sachs’ top defense stock pick was Lockheed. Lockheed’s jets have until now been unparalleled worldwide in stealth technology. RTX (formerly Raytheon) and Boeing were the next two US defense stocks. An analysis of Goldman Sachs’ Q3 2023 stock portfolio reveals that the bank has reduced its stake in Lockheed and RTX by 11% and its stake in Boeing by 3%. All of these American defense stocks were also included in our coverage. Top 16 Defense Contractors in the World in 2023 (Lockheed, RTX, Boeing, General Dynamics Corporation (NYSE:GD) rounds out the top four.

With these details in mind, let’s take a look at the best U.S. defense stocks to buy, according to analysts. Top analysts list Rocket Lab USA, Inc. (NASDAQ:RKLB), Planet Labs PBC (NYSE:PL), and V2X, Inc. (NYSE:VVX) as top U.S. defense stocks.

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our methodology

To create our list of the best U.S. defense stocks according to analysts, we ranked the 40 most valuable U.S. aerospace and defense stocks by analyst average price increase and selected the top stocks. Later, the list was further refined, removing stocks that served purely civilian needs.

For these top US defense stocks, we used hedge fund sentiment. The top 10 consensus stocks selected by hedge funds have outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail). That’s why we pay close attention to this often ignored metric.

Top 11 U.S. defense stocks chosen by analysts

11. Spirit Aerosystems Holdings, Inc. (NYSE:SPR)

Analyst average price target increase: 18.26%

Analyst average price target: $33.16

Spirit Aerosystems Holdings (NYSE:SPR) is a small but important company when it comes to military aircraft. This is because the industry as a whole utilizes its expertise in the fundamentals of aircraft, the airframe. The stock has an average rating of Buy, but the company has missed analyst EPS estimates in three of the last four quarters. However, U.S. defense stocks soared in January 2024 after Boeing delivered the 737 Max to China.

During the third quarter of 2023, 27 out of 910 hedge funds tracked by Insider Monkey bought and owned shares of Spirit AeroSystems Holdings (NYSE:SPR). Herbert Frazier’s Hill City Capital became the company’s largest shareholder with an $83.6 million investment.

Like Planet Labs PBC (NYSE:PL), Rocket Lab USA, Inc. (NASDAQ:RKLB), and V2X, Inc. (NYSE:VVX), Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is a top U.S. defense company. It’s a company. According to analysts, the stock price.

10. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)

Analyst average price target increase: 20.60%

Analyst average price target: $20.55

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a diversified American defense stock that dabbles in technologies such as hypersonic navigation, engine propulsion, and satellite communications. The company is busy keeping up with the latest technology, announcing in January 2024 that it had acquired a 3D printing company.

By the end of last year’s third quarter, the company was a shareholder in 11 of the 910 hedge funds surveyed by Insider Monkey. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s largest hedge fund investor is Katherine D. Wood’s ARK Investment Management, with $94.1 million in stock.

9. Triumph Group, Inc. (NYSE:TGI)

Analyst average price target increase: 52.49%

Analyst average price target: $9.50

Triumph Group, Inc. (NYSE:TGI) is a defense and aerospace company that sells shock absorbers, engine controls and other products to military aircraft manufacturers. U.S. defense stocks are in great shape in 2024, as Baird and BofA upgraded the stock from Neutral and Underperform to Outperform and Buy, respectively, in January 2024.

During the September 2023 quarter, 21 out of 910 hedge funds surveyed by Insider Monkey held shares in Triumph Group (NYSE:TGI). The largest shareholder was Herbert Frazier’s Hill City Capital, with 5.3 million shares worth $41 million.

8. Smith & Wesson Brands, Inc. (NASDAQ:SWBI)

Analyst average price target increase: 23.06%

Analyst average price target: $16.17

Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is a classic start to our list of the best U.S. defense stocks. He is one of the most iconic gun brands in the United States. The company has had a busy 2024 so far by launching two new guns, but now it’s facing charges against Smith & Wesson Brands Inc. for not using smart gun technology in its weapons. NASDAQ:SWBI) is facing an interesting lawsuit. The company says it denies it.

By the end of Q3 2023, 6 of the 910 hedge funds in Insider Monkey’s database had purchased shares of Smith & Wesson Brands, Inc. (NASDAQ:SWBI).

7. Mercury Systems, Inc. (NASDAQ:MRCY)

Analyst average price target increase: 24.81%

Analyst average price target: $38.13

er Monkey had Mercury Systems, Inc. (NASDAQ:MRCY) is a defense semiconductor company that sells integrated controllers and related products. The company won a $96 million contract from RTX in February 2024 to provide signal processing chips for the Army’s missile defense system.

In the fiscal year ended September 2023, the company was a shareholder in 21 of the 910 hedge funds tracked by Insider Monkey. Barry Rosenstein’s JANA Partners was the largest hedge fund shareholder in Mercury Systems, Inc. (NASDAQ:MRCY) with a $174 million stake.

6. Ducommun Incorporated (NYSE:DCO)

Analyst average price target increase: 30.34%

Analyst average price target: $65.60

Ducommun Incorporated (NYSE:DCO) provides computer hardware such as cables and circuit boards to U.S. defense companies. The company’s stock has an average rating of “Buy” and an average analyst price target of $65.60.

Insider Monkey’s Q3 2023 survey of 910 hedge funds revealed that 11 hedge funds held shares in Ducommun Incorporated (NYSE:DCO). Mario Gabelli’s GAMCO Investors was the company’s largest investor with his 387,336 shares valued at $16.8 million.

Rocket Lab USA, Inc. (NASDAQ:RKLB), Ducommun Incorporated (NYSE:DCO), Planet Labs PBC (NYSE:PL), and V2X, Inc. (NYSE:VVX) are U.S. defense-related companies, according to analysts. It is listed among the top stocks.

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Disclosure: None. Top 11 U.S. defense stocks chosen by analysts Originally published on Insider Monkey.