Elbit Systems' Stock Soars 8.1% on Strong Earnings and $1.6 Billion European Contract

Elbit Systems (ESLT) stock surged 8.1% after announcing a $1.635 billion European contract and strong quarterly earnings. Analysts set a one-year price target averaging $497.50, reflecting an 8.39% upside potential. GuruFocus projects a GF Value of $303.14, suggesting a possible 33.95% downside. The contract includes advanced defense technologies and systems, enhancing Elbit's long-term growth prospects. Quarterly earnings per share exceeded expectations at $3.23, with significant revenue increases across various segments.

Elbit Systems (ESLT) stock surged 8.1% following the announcement of a $1.635 billion European contract and robust second-quarter earnings. The contract, which includes advanced defense technologies and systems, underscores the company's long-term growth prospects. Analysts have set a one-year price target averaging $497.50, reflecting an 8.39% upside potential. GuruFocus projects a GF Value of $303.14, suggesting a possible 33.95% downside. Quarterly earnings per share exceeded expectations at $3.23, with significant revenue increases across various segments.

The Israeli defense contractor reported revenues growing 21% year over year, driven by strong domestic and global demand. Aerospace revenues increased by 12%, with Precision Guided Munition (PGM) sales in Israel and Asia Pacific, and Unmanned Aerial Systems (UAS) sales in Europe contributing significantly. C4I and Cyber revenues rose by 21%, primarily from radio systems and command and control systems sales in Israel and Europe. Land revenues increased by 45%, mainly due to ammunition and munition sales in Israel and Europe. Elbit Systems of America revenues grew by 4% due to increased Maritime and Warfighters systems sales [3].

The $1.635 billion contract, which is part of a broader rearmament effort in Europe, will enhance Elbit's long-term growth prospects. This contract aligns with Elbit's portfolio across precision weapons, electro-optics, command-and-control, and unmanned platforms, positioning the company to compete in both prime and subsystem roles. The contract will also facilitate localization of production to meet EU content rules, potentially securing long-term framework agreements [2].

Elbit's stock performance reflects a broader trend in the defense sector, driven by rising global military budgets and ongoing conflicts. However, analysts caution that the sector's performance may be sensitive to geopolitical developments and the duration of the current defense spending cycle. The company's ability to convert backlog into revenue without burning cash and defend margins as the mix normalizes will be crucial for sustained growth [2].

References:
[1] https://www.barrons.com/articles/elbit-systems-earnings-stock-price-1622b001
[2] https://nai500.com/blog/2025/08/elbit-systems-eslt-jumps-on-earnings-and-1-64b-deal/
[3] https://www.elbitsystems.com/news/elbit-systems-reports-second-quarter-2025-results