6 Defense Stocks That Look Like Buys After a Slump, Says Citi

After a recent slump, defense stocks are presenting attractive investment opportunities, according to Citi. With a focus on growth and undervalued valuations, let's explore six defense stocks that could be worth considering.



1. Science Applications International Corporation (SAIC)
- Citi raised its price target from $160 to $176, indicating a 23.3% potential gain relative to its current price.
- SAIC's shares have increased by 14.57% YTD, driven by lucrative contracts with the military and NASA.
- The company's next earnings call is due on December 2.

2. L3Harris Technologies (LHX)
- Citi increased its price target from $268 to $291, suggesting a 20.7% potential rally.
- LHX shares have gained 15.53% YTD, boosted by rising defense budgets in Europe and additional spending bills in the U.S.
- The company's next earnings call is scheduled for October 24.

3. General Dynamics (GD)
- Citi raised its price target from $331 to $354, indicating a 19.57% upside for the stock.
- GD shares have gained 14.50% YTD, thanks to a broad spectrum of defense industry coverage and significant contract wins.
- The company's next earnings report is set for October 23.

4. Leidos Holdings (LDOS)
- Citi raised its price target for LDOS from $169 to $194, maintaining a prior 'Buy' rating.
- LDOS shares have gained 53.96% in 2024, with a forecasted upside of 16.67%.
- The company's next earnings report is due on October 29.

5. Lockheed Martin (LMT)
- Citi maintained a 'Buy' rating for LMT, increasing its price target from $570 to $700.
- LMT shares are up 31.87% YTD, driven by the company's position as the largest U.S. defense contractor and significant contract wins.
- The company's next earnings call will occur on October 22.

These defense stocks have shown strong performance and have the potential for further growth, thanks to their diverse product offerings, strong contract wins, and undervalued valuations. As defense budgets continue to rise, particularly in the U.S. and Europe, these companies are well-positioned to benefit from increased demand for their products and services. However, investors should still consider other factors such as earnings growth, dividend yields, and the company's strategic position in the defense industry before making a decision.

In conclusion, defense stocks like SAIC, LHX, GD, LDOS, and LMT present attractive investment opportunities after their recent slump. With strong growth drivers and undervalued valuations, these stocks could be worth considering for investors looking to capitalize on the defense industry's growth potential.