Stocks of defense companies are rising at the time of writing, following reports that Iran launched a ballistic-missile attack on Israel.
Israel Defence Forces made this announcement just hours after a White House official warned Iran was preparing an attack.
Tuesday, the S&P 500 Aerospace and Defense Index gained 3.0% due to the geopolitical escalation. Elbit Systems, Lockheed Martin and Huntington Ingalls are among the stocks that are gaining.
Elbit Systems Ltd. (NASDAQ: ESLT).
Elbit, one of Israel’s largest defense electronics companies, has seen its stock rise by nearly 5.0% in the past week. The company provides communication equipment, surveillance system, drones, and more. Elbit is a major supplier of defense electronics to Israel’s military.
Investors are flocking towards ESLT as the demand for its products has increased significantly due to the ongoing conflict in Middle East. Investors may also be attracted to Elbit shares by a dividend yield of around 1.0%.
Elbit Systems announced its financial results for the 2nd quarter in August. The results were well above Street expectations.
The Nasdaq listed firm ended the third quarter with a total order backlog worth $21.1 billion. It reiterated that global geopolitical tensions have a significant impact on the demand for its products.
Lockheed Martin Corp (NYSE: LMT)
After Iran launched an attack against Israel, Lockheed Martin shares are up 5.0%. In June, Israel purchased 25 fighter jets from Lockheed Martin for $3.0billion.
The ongoing conflict in Ukraine has also helped LMT’s share price to rise by nearly 50% over the last seven months. The US approved a recent F-35 jet deal worth $7.2 billion with Romania.
Analysts have given Lockheed stock a consensus rating of “overweight”. The Street-high target price of $704 indicates a potential gain of more than 15% from here.
LMT shares are attractive because of their dividend yield of 2.06%.
Huntington Ingalls Industries Inc (NYSE: HII)
Huntington has extended its recent gains following the escalation in the Middle East conflict on Tuesday. It is one the largest military shipbuilding firms in the United States.
The Ukraine war, and the Israel-Hamas conflict which is now spreading to neighboring countries, has resulted in an increase in global defense spending this year. This includes naval operations.
HII pays a current dividend yield of 1.95%, which keeps income investors interested.
Last week, Gautam Khanna – a TD Cowen Analyst reiterated his “buy rating” on Huntington stock. He expects it to reach $290 in the next 12 month. His price target suggests a potential 10% gain.
This post ESLT LMT HII: 3 Defense Stocks Surge as Iran Launches Missile Attack on Israel may be modified based on updates.
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