Citi Research believes that the market failed to properly serve aerospace and defense stocks, leaving a huge opportunity for signs of growth in defense spending. The defense stock has been hit in recent weeks, given Doge’s cost-cutting efforts are closely linked to President Donald Trump’s mixed information about his trade and military spending plans. The iShares American Aerospace ETF (ITA) popped up after Trump’s election victory but lost more than 3% in the past month, as Trump’s proposal in mid-February pushed the U.S. proposal that a massive cut in defense spending could be made. Citi research analyst Jason Gursky remains optimistic about the industry, especially given Europe’s continued defense spending and the missile defense dome Trump plans to invest in the United States and “resurrect” the domestic shipbuilding industry, he mentioned in his speech to Congress on Tuesday. European countries have worked to increase military spending following a tense Oval Office meeting between Trump and Ukrainian President Volodymyr Zelenskyy on Friday. “We think that this is too penalized given the macro context, which may indicate the middle growth,” Gursky said in a note to clients on Wednesday. “The pricing of the market is the lower limit of historical growth rates for defense stocks,” he added. “Defense spending in Europe could be significantly higher, with the U.S. Congress recently passed a budget resolution that has risen by $300B over the next decade.” “It is important that this spending growth is likely to be conducive to modernization in order to deter peers in recent years. So we think it’s time to buy defense stocks.” Gursky mentioned some of the bought defense stocks that have risen. With some of the options below: Lockheed Martin, Northrop Grumman and RTX are the main beneficiaries of Trump’s missile defense dome program, according to Gersky. Among these names, RTX is an outlier of its age-to-date performance, up 11.2% after quarterly revenue and revenue savings in late January. Citi’s target target for RTX shows that the stock can increase by another 19%. Lockheed shares, on the other hand, dragged on this year after weapons manufacturers issued disappointing forward guidance and fourth-quarter turnovers. The company’s rotation and mission systems and space systems divisions did not meet Wall Street’s expectations, while its aviation missile and fire departments defeated. According to Citi’s price target, Lockheed can still pop up next year with potential upside potential of 34%. The stock has fallen about 5.3% this year, up 1.5% in Trump’s defense-related announcements so far this week. Northrop also jumped more than 2% in new sentiment this week, with each Citi target likely to jump more than 27%. Citi’s other buy-in defense stocks include General Dynamics, L3Harris Technologies and Curtiss-Wright. General dynamics jumped about 4% on Wednesday on Trump Euphoria, boosting stocks from a year-to-date downturn. The company was also named one of the major contractors on Friday, potentially selling about $2 billion in ammunition and related equipment to the Israeli government. Continued supplementary funding for Ukraine and Israel is part of Gursky’s forecast for the highest growth of the Ministry of Defense throughout the decade and in the near future.
Citi says now is a good time to buy defense stocks | Real Time Headlines
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