Lots of Positive Headlines This Week for Defense Stocks, but Valuations Looking a Bit Stretched
There should be plenty of positive headlines for defense stocks this week ahead of President Trump’s defense budget release on May 23 and following the president's visit to Saudi Arabia, which featured $110 billion of defense deals for U.S. contractors. However, our defense coverage looks fully valued at an average price to fair value of 1.03 and an average forward EV/EBITDA of 11.5 times, well above the sector’s historical average of roughly 8.0 times. That said, we like narrow moat Raytheon fr...Lockheed Martin is a security and aerospace company. The company has four segments: Aeronautics, which is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft; Missiles and Fire Control, which provides air and missile defense systems, logistics, fire control systems, and mission operations support; Rotary and Mission Systems, which provides design, manufacture, service and support for military and commercial helicopters, radar systems, and simulation and training services; Space, which researches, designs, develops, engineers and produces satellites, space transportation systems, and strategic, strike, and defensive systems.
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