Over the weekend, officials around the world gathered at the Munich Security Conference in Munich, Germany, focusing on defense spending and the Ukrainian war. European officials appear to express willingness to increase spending under pressure from U.S. President Donald Trump. European Commission President Ursula von der Leyen said defense spending could exempt the group from fiscal rules, while NATO chief Mark Rutte said the alliance would raise its spending target to at least 3%. European defense stocks soared on Monday, with the Stoxx 600 aerospace and defense index reaching record heights. Economists at Investment Bank Citi said that if NATO members, most of whom are Europeans, are committed to increasing spending targets from 2% to 3% in GDP, the European defense sector will be significantly improved. “We estimate potential sectors to rise 30%, accounting for 3% of GDP (a 50% increase in the suggestion of currency time value),” analysts said in a report on Monday, from a shift from such. Among the companies highlighted by Citi, Hensoldt is the German defense technology company. Shares of the Dow-based company have risen 33% so far this year, with shares in the company up more than 12% after the Munich Security Conference. The German government owns 25% of the company, making it the company’s largest individual shareholder. Based on its estimates, research and the company’s own reports, Citi says Hensord’s European sales are as high as 86%. In another note on Monday, analysts at German MWB Research raised their price target for Hensoldt from €43 per share to €45 ($47.12) but lowered the stock from buy to hold. MWB’s Jens-Peter Rieck said in his notes that in 2024, EU and Canada’s defense investment soared to 462 billion euros, with European NATO members donating 326 billion euros. “Hensoldt benefited from this trend, garnering about 0.7% of European NATO defense spending,” he said. “However, the long-term growth outlook beyond 2030 is uncertain due to the increasing reliance on existing platforms and competition.” Saab Analysts at (Saab), Qinetiq, Babcock Citi also named Swedish defense manufacturers Saab, British defense organizations Qinetiq and Aerospace Firm Babcock, which has been signed by the British government to provide Ukrainian military equipment with the frontlines in the country’s opposition to the Russian war. Provide services for Ukrainian military equipment. Shares of all three companies made gains on Monday as investors responded to geopolitical news in Europe. Citi noted that its named companies are exposed to various European countries, some of which are expected to increase spending faster than others. “It is important to recognize that there are regional differences within Europe,” the bank’s analyst explained. “A country such as Sweden (to which Saab has (around) 40% sales exposure) is growing defense spending at a much higher rate (and from a lower base) than a country like the UK (to which QinetiQ and Babcock have the highest exposure).” JPMorgan analysts told clients on Friday that every 50 European NATO members’ defense spending The benchmark point changes to about $115 billion in currency differences, and U.S. defense stocks are also expected to benefit. It named many American companies with European risks. “If we assume that 40% (increasing defense spending) is for equipment and that U.S. contractors may be able to account for 30% of that equipment, the increase in addressable market for U.S. contractors over the years would be (about $15 billion) “They said. JPMorgan said US defense giant Lockheed Martin and RTX-owned Raytheon (RTX-owned Thor already benefited), Europe accounts for 11% of the sales of both companies. It also named Northrop General Dynamics and Boeing (excluding its commercial aircraft division), a U.S. defense company with a lot of revenue. “Growth in European defense spending should represent opportunities for U.S. contractors given the good relationship within the NATO alliance,” said an analyst at the Investment Bank. “In addition, the U.S. may push Europe to buy more U.S. goods as its trade agenda.” Part of the weapon can work here.”
Stocks that can benefit from larger European defense spending | Real Time Headlines
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