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BAE Systems

BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's US- and UK-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the US government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the US Defense Department; the air segment includes BAE's share of US and European air programs as well as its businesses in Saudi Arabia and Australia; and the maritime segment comprises UK land- and marine-based activities.

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El sector de defensa en Europa crece, pero ¿aún hay oportunidades de inversión o las valoraciones ya reflejan su potencial?

Acciones de defensa en Europa: ¿Siguen siendo una inversión rentable o ya están sobrevaloradas?

BAE Systems PLC

Global geopolitical tensions reached a new high after the contentious February 28 <a href="https://www.benzinga.com/news/25/03/44064861/trump-cancels-news-conference-with-zelenskyy-after-tense-meet-in-oval-office-report">Oval Office meeting</a> between Ukrainian President Volodymyr Zelenskyy and US President Donald Trump.
A trend toward less US military support for Ukraine was evident for many investors long before that meeting, as European stocks soared in early 2025, especially those in the defense sector.&nbsp;
The DAX index in Germany rose to new all-time highs this year, for example, as Europe begins reshuffling policy plans in view of a reduction in U.S. military support. Germany has led the charge so far, announcing a 500 billion euro (about $535 billion) stimulus package aimed at bumping up defense and reinvigorating the country's stale economy.&nbsp;
<h2 class="wp-block-heading">Six European Defense Stocks Set To Keep The Rally Going</h2>
One aspect of the German stimulus package that seems to intrigue investors is the defense spending boost, which gets around the country's ‘debt brake' designed to limit government spending. The debt brake caps spending at a percentage of national GDP. The new agreement calls for all defense spending beyond 1% of German GDP to not be counted against this cap, which is music to the ears of European defense companies, whose stocks have been sizzling since late 2024.&nbsp;
It&#8217;s important to keep in mind that as foreign stocks, they trade using ADRs on OTC marketplaces. Be sure to understand the risks of buying international companies via OTC marketplaces before investing.
<h2 class="wp-block-heading">Rheinmetall AG </h2>
Rheinmetall AG (OTC:<a class="ticker" href="https://www.benzinga.com/stock/RNMBY#OTC">RNMBY</a>) has been the face of the European defense rally so far. The stock has more than doubled in the last 12 months, including a 90% gain year-to-date (YTD). Rheinmetall is one of Germany's leading providers of military vehicles, weapons, ammunition and electronics for defense. The Dusseldorf-based company has existed since 1889 and employs more than 24,000 people.
<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcz_vG_KlxR1YFjEzC7CM5uirLdtpbjuTsj1DEa5dom-LiAvPzKDxxGg-QOEWA3cq3hC67yj-R92podeAkV2ykefZNcLkN1UI3IBZVO_wht8e15qkjdiyZYiIcR856Uojng01QU4g?key=bRH-zOh8yeo-luC60d2Cc_7K" alt="" /></figure>
Rheinmetall's stock trades on the DAX exchange in Germany but American investors can find it on the OTC markets trading as RNMBY. The company's valuation has gotten stretched during this recent rally, with a P/E ratio approaching 100 and a price-to-sales rate of 5.87. The company's forward P/E of 37.6 is in line with competitors like Saab and Rolls-Royce. It recently reported the USD equivalent of $955 million in free cash flow and 40% year-over-year (YoY) revenue growth. The stock ended Friday's session on a 6.5% drawdown as investors took profits amidst a choppy trading day. Some see this as an opportunity for a new entry as technical trends remain in place.&nbsp;
<h2 class="wp-block-heading">BAE Systems plc </h2>
BAE Systems (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BAESY#OTC">BAESY</a>) had just completed its first ‘lost year' since COVID as 2024 drew to a close, but the recent rally has taken the British defense firm back to new all-time highs. BAE's stock closed at $57 on the final day of 2024 trading &#8211; a mere $1 above the price it opened on the first 2024 trading day. But 2025 has been a fresh start and the company is up nearly 45% YTD.
<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdNq-SXMbawg2AA0la6ht2uny1OZywnTvqRudwtgUdvTE2bqX8QO8tr1Ho-mF9F7hFXtAkqYsl68mDauucE_PDYWV6eX1pQ5lTv2MbXQIBZXwiFMTA-fxTD0eCYwu47s1hEdBXnAQ?key=bRH-zOh8yeo-luC60d2Cc_7K" alt="" /></figure>
Despite the parabolic move, BAESY remains an undervalued stock compared to peers like Rheinmetall and Saab. The stock trades at just 22 times forward earnings, 1.87 times sales and sits on a massive free cash pile equivalent to $3.5 billion. Profit growth accelerated in 2024 following a sluggish 2023. The company's 7.4% profit margin is one of the sector's best figures. It also pays a 2% dividend yield, tops amongst today&#8217;s picks.
The stock could get a boost from political tailwinds in 2025 as well. Like Germany, the UK is preparing for more accommodative fiscal policy to boost its economy, especially the defense sector.
<h2 class="wp-block-heading">Leonardo S.P.A. </h2>
Leonardo SPA (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FINMY#OTC">FINMY</a>) trades on the Italian stock exchange, and like other European defense firms, it started 2025 with a bang. Shares are up more than 72% so far this year, with possibly more room to run as the EU's fiscal plans come into focus.
<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeVnLhxuMB974uvA6X4FLkAq4Z3Xq4j7WWoeKicj2H3PT3zxbJ1n0hSiuP-aFMS7j6YWc_krkegiFes7ztcafUozkkyE5vPhBzTefPbOkQoLyACPMSlpFIyrNpyjAn7b0KCdbVYLg?key=bRH-zOh8yeo-luC60d2Cc_7K" alt="" /></figure>
Leonardo SpA has seven different business divisions, including Helicopters, Aeronautics, Electronics and Defense Systems. The firm is one of Italy's largest, with nearly 60,000 employees and a $27 billion market cap. The stock finished 2024 up more than 50% on the year, its share price has already gone from $13 to $23 in 2025.
Like BAE Systems, Leonardo remains undervalued compared to some of its more high-flying peers. Trading at 23 times forward earnings and just 1.4 times sales, the company has posted 21% YoY revenue growth. Shares pulled back on Friday, which could signify investors taking profits as the Relative Strength Index (RSI) veered into overbought territory. A minor correction could create an opportunity for new investors.
<h2 class="wp-block-heading">Thales S.A. </h2>
Thales S.A. (OTC:<a class="ticker" href="https://www.benzinga.com/stock/THLEF#OTC">THLEF</a>) is a French aerospace company specializing in defense equipment, including combat systems, surveillance, training simulations, avionics equipment and more. With over $22 billion in annual revenue and more than 83,000 employees, Thales is one of the largest defense contractors in Europe. It has also been one of the best-performing stocks on the French CAC index, with a nearly 83% gain YTD.
<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXezuK4B9ff5pjf8XJDIkfIdzZsIOpy0sk5sinnM-gHVA4HBfwv3cT5UPmc0XuCHg2vfpn9TFelhQIv2STCxRUxNH_uOSk9Uzr6F7BqDiHEJqdhHi29TMDsQqQzP5w9-fAzxFVRUIg?key=bRH-zOh8yeo-luC60d2Cc_7K" alt="" /></figure>
The stock looks pricey at the moment with a P/E ratio over 50, but it trades at just 23 times forward earnings and has more than $2 billion in free cash flow. In its most recent report, the company stated YoY quarterly earnings growth of 7.4% and pays a 1.46% dividend yield, which is bested only by BAE Systems&#8217; 2% yield amongst our defense stock picks.
<h2 class="wp-block-heading">Rolls-Royce Holdings plc </h2>
When investors think of Rolls-Royce (OTC:<a class="ticker" href="https://www.benzinga.com/stock/RYCEY#OTC">RYCEY</a>), they usually picture the car driven by their favorite athlete, but the company makes more than just high-performance sports cars. It operates in multiple divisions: Civil Aerospace, Defense, Power Systems and New Markets. Rolls-Royce is the largest stock by market cap on our list at $87 billion. The company earns more than $24 billion in annual revenue.&nbsp;
<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdLlyU-1_uQUcX4tMiQoR16J13Q7MWEyfv43FSZCoOPnHcZZovjaMJhOYU5hE9BD3k9edK9s2LnvZr0lMzSdd5vpV2ySGgpN-KYKqtkL2idrO4jzja32wfc-yhOv_V_0dauMV75?key=bRH-zOh8yeo-luC60d2Cc_7K" alt="" /></figure>
Rolls Royce stock is up 51% this year, which lags behind other soaring European defense contractors, though that gap could soon be closed. The company's 13.3% profit margin dwarfs most competitors in the defense industry; the stock trades at 28 times earnings. It also has an impressive $3.74 billion in free cash flow ready for deployment, which is not a bad situation to find yourself in when the government is expanding fiscal policy.
<h3 class="wp-block-heading">And Before We Go&#8230; </h3>
<h2 class="wp-block-heading">Live On Wednesday: How To Trade This Week's Market Chaos</h2>
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6 Defense Stocks To Watch After Trump Halts Weapons Shipments To Ukraine

A Trump presidency<a href="https://europeancapitalinsights.substack.com/p/europe-frets-about-recession-after?r=3nmatg"> has raised concern in Europe that a new round</a> of tariffs under his <a href="https://www.euronews.com/business/2024/11/04/how-much-could-trumps-tariffs-damage-europes-economy">administration will cause a economic recession</a> in Europe.
A trade war during Trump's four-year term would also increase the probability of the European Central Bank (ECB) cutting rates faster to spur growth. Analysts issued pessimistic outlooks for European economic growth after Trump won the election.
On election day, the US dollar rallied sharply, sending the euro to a four-month low and boosting Bitcoin by 10% to a record high. 
European stocks exposed to the US have already shown their vulnerability. A Barclays basket of 28 <a href="https://markets.businessinsider.com/news/stocks/europe-trump-win-outlook-trade-war-tariff-crypto-djt-election-2024-10">European stocks sensitive to US tariffs</a> has underperformed the broader STOXX600 index by 15% this year.
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXct8vnUjY-sPthKAo54TyYzmMYbFqSL4UEAYKQ92gAtCRQgUelVyEGMtqrSv5-U9J6NvK7t574p40MtP_A5qNqhIcmcpalKh6Mo9wsCHR4vajc8gXwstW6pEO71UptWP9JJCG9DNX2_i2uFfEmKYzcnqF5rE03Y8J96wUCGAoSoj95B14a5yVE?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
European stocks vulnerable to Trump tariffs, Source: Barclays Equity Research&nbsp;
&#8220;Tariff concerns have been a drag on EU equities&#8217; relative performance year-to-date,&#8221; Barclays analysts led by Emmanuel Cau wrote in a note on October 23. A basket of European stocks at risk of Trump tariffs declined compared to those geared toward Democrat policies.&nbsp;
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfLgvwadHYOazAM9Zi-a21uG9w7SBpC9fl_QTuUaoa3Zmta_kqPhfkbiEU1xgFnSvUYlS6ptCm16qeL0eKpnr4tl4Pj77Qz28PN6Gn4NPCI-aS736Rq-lP9TRf94MPI5aXAeKN_myLiVpshQNhbRPYpEacxegs_pBRx9iSN?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
European stocks sensitive to Trump fall, Source: <a href="https://www.bloomberg.com/news/articles/2024-11-06/european-stock-futures-drop-over-tariff-worries-as-trump-leads?srnd=phx-fixed-income">Bloomberg</a>
<h3 class="wp-block-heading">Trump Presidency Could Impact Europe's GDP</h3>
The European Union (EU) will need to confront the reality of a much different relationship with its largest trading partner from January 20. Previous <a href="https://www.euronews.com/my-europe/2024/10/24/would-donald-trumps-trade-tariffs-hurt-europe">tariffs on 6.4 billion in EU steel and aluminum</a>, alongside threats on automotive imports, have shown how US protectionism can reverberate through European economies.&nbsp;
Trump&#8217;s potential trade policies in 2025, including a proposed 10% to 20% <a href="https://www.ft.com/content/c0f1d1b9-8348-4b7d-8ab7-186fcf2ebbd1">tariff on European goods</a>, pose a substantial threat to European growth. Following Trump&#8217;s win, Goldman Sachs <a href="https://www.ft.com/content/783a573c-7ff3-461c-86f5-f194a89e3926">downgraded Europe's growth</a> for 2025 from 1.1% to 0.8%, citing limited European auto exports.
The German economic institute IW believes the <a href="https://www.reuters.com/markets/europe/trump-presidency-could-deal-heavy-blow-germanys-flagging-economy-2024-10-24/">Eurozone&#8217;s GDP could decline by 1.5%</a> in 2027 and 2028. Goldman Sachs expects a 1% reduction if a 10% universal tariff is implemented instead.
Historically, Trump&#8217;s tariffs have hampered European growth due to steep declines in exports, a trend that could repeat. Major exports to the US accounted for ~90% of all European transatlantic exports in 2023 to €502.3 billion, European Commission (EC) data showed.&nbsp;
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcvDK80Z1hUJyXyvBBoAMMZeFNr-xIVF1HOlXtj5f6tyZXetVpHGPs9afu43LAEz62sGA2rBTRYFExGxZIpot6NEMoR9FSz8MZpQOWeaegFSiq-af0hbjlqRKJQcifBBKtRYdpvm-brz9WvSj6543imX5QpjbXn9iE8MSyrl2c9XKSTRVJvkWo?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
EU trade with the US by product, Source: European Commission
<h3 class="wp-block-heading">Trump Presidency Could Cause Eurozone GDP Loos</h3>
The blow to the Eurozone from a potential 1.5% GDP reduction could translate to a €260 billion loss on an estimated GDP of €17.4 trillion for 2024. This is over half the entire transatlantic exports registered in 2023.
"The direct effects and the indirect effects and the <a href="https://www.bloomberg.com/news/articles/2024-11-06/ecb-s-guindos-warns-of-huge-implications-of-trump-tariff-plans">deviations of commerce will be huge</a>, ECB Vice-President and French central bank head Francois Villeroy said on Wednesday.
Even the lower end of the proposed tariffs would compel ECB policymakers to cut rates more aggressively in 2025 if Trump implements his economic policies. Sven Jari Stehn of Goldman Sachs said in a note on Wednesday that he expects the ECB to cut an additional quarter-point in July.
&#8220;The American election must sound like <a href="https://www.reuters.com/markets/ecbs-villeroy-trump-election-means-more-risks-world-economy-2024-11-06/">a wakeup call for Europe</a>,&#8221; Villeroy said.&nbsp;
<h3 class="wp-block-heading">Germany At Greater Risk From Trump Presidency</h3>
Nations with large trade surpluses with the US face significant risks from policies that have strained transatlantic economic relationships in the past.&nbsp;
&#8220;Half of Germany&#8217;s growth always comes from exports and if you look at what&#8217;s going on in the world, you have to say that this pillar is under attack,&#8221; Germany's Economy Minister Robert Habeck said in October.&nbsp;
Germany exported over €157.7 billion of goods to the US in 2023. However, exports to the US contracted by 0.3% amid slowing demand and geopolitical escalation.&nbsp;
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcunKZmSO2PXjTxoH5i3tumZTnE67LZaCy7n4plCOQCM-KaRa1NuHKfI4lwpeo7MwLbb0Aqn3RC9uLnOkJStOR3w4q2RuS55tghIU6m7QH1DLzfjJN5JdP3W4yQjJtarOqVnK06z5h7keeKLRkVAAEVOWJuwmL_gOl6HSiH65l3dYNqP9_E8Tc?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
Germany Exports to the US, 2012-2023, Source: Tradingeconomics
Dirk Schumacher, head of European macro research at Natixis Corporate &amp; Investment Banking Germany, says a 10% tariff increase could reduce Germany&#8217;s GDP by approximately 0.5%. A study by the Hans Boeckler Foundation macroeconomic institute suggests a <a href="https://www.reuters.com/markets/europe/trump-presidency-could-deal-heavy-blow-germanys-flagging-economy-2024-10-24/">1% GDP erosion by 2026 if Trump implemented a 20% tarif</a>f.&nbsp;
<h3 class="wp-block-heading">Germany Is Only G7 Nation Without Growth For Two Years</h3>
Germany remains the only G7 nation that has <a href="https://www.euronews.com/business/2023/07/30/germany-expected-to-be-only-major-economy-not-to-grow-this-year">failed to grow for two years</a> due to higher energy prices, borrowing costs, and a slow rebound in China. Europe&#8217;s largest economy would suffer if its largest trading partner reduced output and imposed tariffs on China.
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfbVgaykBooXaV2_V2tFat4uPtjSxEtqJGbs1aXsckrchdNTyahnrivFRGcxzAeLoaUgFZv01KIV-g8Yk9HsuFFKgTBaSOSnOMknWvtj2G33RbD160IYtL7hnpn4l8SEaHdqM7rlcRtquZTqdr_AIIQEqM4qaXq4XQsubxXGLI35Dt86aCL_ds?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
German Exports to China, 2020-2024, Source: <a href="https://www.ceicdata.com/en/germany/trade-statistics-by-country/exports-china">CEIC</a>
&#8220;Germany isn&#8217;t going to be bailed out by a restoration of growth in China," Jacob Funk Kirkegaard, senior fellow at Bruegel and the Peterson Institute for International Economics, told Reuters.
An Ifo study found that German exports to China and the US could fall by 9.6% and 14.9% in a full-scale trade war scenario in which the US imposes a 60% tariff on Chinese goods. Pharmaceutical and car exports would be hit the hardest, down 35% and 32%, the Ifo said.
Trump's tariffs would substantially trim European exports to the US, possibly creating a cycle of retaliation.
<h3 class="wp-block-heading">Swift Retaliatory Action From Europe</h3>
Nigel Green, CEO of deVere Group, believes that Trump's presidency would initiate a new trade war with Europe but sounded the alarm of swift retaliation.&nbsp;
"The market is <a href="https://www.financialmirror.com/2024/10/29/trump-trade-war-with-europe-would-hurt-us-stocks/">underestimating the risk of swift European retaliation</a> and the pressure this could place on key American stocks," he said.
Retaliatory measures could hit US earnings in the S&amp;P 500 by 1.5% next year. However, European stocks exposed to US tariffs could plunge as much as 7%, according to Barclays.&nbsp;
&#8220;In the event of a full-blown trade war, we could see up to a high single-digit drag on EPS growth with Germany," Barclays' head of European equity strategy, Emmanuel Cau, said. However, Goldman Sachs believes that a 1% GDP loss, if transported, would erase EPS growth for 2025.
Certain European sectors could still gain from a Trump presidency.&nbsp;
<h3 class="wp-block-heading">Defense Will Benefit From Trump Presidency&nbsp;</h3>
In addition to the energy sector, defense companies could see increased demand from European nations under a Trump Presidency. He is likely to push them to increase their NATO defense spending.&nbsp;
Earlier in 2024, <a href="https://www.theguardian.com/world/2024/feb/14/nato-chief-rebukes-donald-trump-and-announces-record-defence-spending">he threatened to "not protect"</a> any alliance members that failed to ramp up their defense spending to the 2% GDP target.&nbsp;
Following the warning, NATO claimed that more than 18 members would <a href="https://www.euractiv.com/section/defence-and-security/news/nato-says-18-members-will-reach-2-spending-target-this-year/">surpass the 2% target </a>this year. The number of allies meeting or exceeding the target soared to 23 this year, prompting <a href="https://breakingdefense.com/2024/10/trump-wants-nato-to-hit-3-percent-gdp-on-defense-the-us-could-fall-short/">Trump to raise the bar to 3% of GDP</a>.&nbsp;
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeZHW4VZpdEt-DWO4ekjR7UlrTXpLl0U3oYjPArwQ23JgwiOyv-MQt9EkTOATSvEu0hHQ9HLnkkQbdG2dmLCJQVZm42BqZNmLcIE_HEdaNGpHnBJJuZWpF2fF_xp61i66oBsWk44hSOdsCcbrEs91RBX3N4R3C_fDi1DQetJh3FM3SV4dgExw?key=heoBp3pffbhAPsc75vkVjtPK" alt="" style="width:624px" /></figure>
NATO members&#8217; defense expenditure as a share of GDP, 2024e, Source: <a href="https://www.nato.int/nato_static_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-2024-en.pdf">NATO</a>
After taking office, Mark Rutte, the new Secretary General of NATO, said, &#8220;thanks to Trump&#8221; NATO increased defense spending. In Europe, <a href="https://www.aljazeera.com/news/2024/7/11/how-much-does-each-nato-country-spend-in-2024">Poland doubled the defense spending target</a> at 4.12% and Estonia by 3.43%, followed by Latvia and Greece.
<h3 class="wp-block-heading">European Stocks For Trump Presidency</h3>
Poland, Estonia, Latvia, and Greece have been increasing their defense spending and primarily source military equipment from a combination of US and European defense contractors.&nbsp;
<a href="https://www.nationaldefensemagazine.org/articles/2024/9/24/politics-of-war-color-polands-record-defense-spending#:~:text=Poland's%20recent%20procurement%20deals%20with,loan%20agreement%20announced%20in%20July.">Poland agreed to buy 32 F-35 jets, Apache helicopters and Abrams tanks</a> made by American companies Lockheed Martin (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>)  and Boeing (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) and <a href="https://www.defensenews.com/global/europe/2024/03/05/saab-wins-polish-mega-order-for-carl-gustaf-recoilless-rifles/">signed a contract with Saab </a>(OTC:<a class="ticker" href="https://www.benzinga.com/stock/SAABF#OTC">SAABF</a>) earlier in the year to supply ammunition, training equipment, and recoilless rifles. It also awaits delivery of Raytehon's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>) LTAMDS radars for its Patriot systems. 
Estonia has<a href="https://www.defensenews.com/global/europe/2023/06/13/estonias-global-arms-buying-spree-seeks-drastic-combat-gains/"> existing ties</a> with Germany&#8217;s Rheinmetall (OTC:<a class="ticker" href="https://www.benzinga.com/stock/RNMBY#OTC">RNMBY</a>), <a href="https://eng.lsm.lv/article/society/defense/04.07.2024-latvia-currently-in-natos-top-four-on-defense-spending.a560311/">Latvia with LMT</a> and <a href="https://www.airforce-technology.com/news/greece-orders-additional-rafale-jets/">Greece with French manufacturer</a> Dassault Aviation (OTC:<a class="ticker" href="https://www.benzinga.com/stock/DUAVF#OTC">DUAVF</a>), along with LMT, <a href="https://www.naval-technology.com/news/us-approves-sale-of-mmsc-ships-greece/?cf-view">BAE Systems </a>(OTC:<a class="ticker" href="https://www.benzinga.com/stock/BAESY#OTC">BAESY</a>)<a href="https://www.naval-technology.com/news/us-approves-sale-of-mmsc-ships-greece/?cf-view"> and repair leader VSE </a>(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VSEC#NASDAQ">VSEC</a>).
Disclaimer:
Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. European Capital Insights is not responsible for any financial decisions made based on the contents of this article. Readers may use this article for information and educational purposes only.
This article is from an unpaid external contributor. It does not represent Benzinga&#8217;s reporting and has not been edited for content&nbsp;or&nbsp;accuracy.

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Trump Presidency Raises Concerns About European Recession

European defense contractors<a href="https://open.substack.com/pub/europeancapitalinsights/p/european-defense-contractors-will?r=3nmatg&amp;utm_campaign=post&amp;utm_medium=web&amp;showWelcomeOnShare=true"> have focused on their submarine </a>and naval asset production to meet rising demand for advanced underwater systems as geopolitical tensions spur an increase in military spending.&nbsp;
European makers of submarines have benefited from the 6.8% annual increase in global military expenditures to <a target="_blank" rel="noreferrer noopener" href="https://www.sipri.org/media/press-release/2024/global-military-spending-surges-amid-war-rising-tensions-and-insecurity#:~:text=Military%20expenditure%20increases%20in%20all,'">$2.4 trillion in 2023</a>. As geopolitical tensions heighten and defense priorities shift, the global submarine market will reach $13.3 billion by 2029 from $9.21 billion in 2024, according to a<a target="_blank" rel="noreferrer noopener" href="https://www.mordorintelligence.com/industry-reports/submarine-market"> Mordor Intelligence report</a>.&nbsp;
"Governments worldwide are increasingly eyeing advanced submarine systems," Mordor Intelligence said. "The global demand for submarine systems is surging, especially in roles like naval intelligence and mine countermeasures operations."
<figure class="wp-block-image is-resized"><a href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fec561aa9-2acd-482e-8b50-9238754b2971_770x393.png" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fec561aa9-2acd-482e-8b50-9238754b2971_770x393.png" alt="" style="width:624px" /></a><figcaption class="wp-element-caption">Submarine Market Size, 2019-2029, Source: Mordor Intelligence</figcaption></figure>
A <a href="https://www.mordorintelligence.com/industry-reports/submarine-market" target="_blank" rel="noreferrer noopener">spike in terrorism on international waters</a> and the need for underwater reconnaissance in rival territories are also driving the demand for naval assets, according to Mordor's report. "A notable trend is the adoption of crewless submarines for enhanced threat detection," it said.&nbsp;
The ongoing war in Ukraine and military strikes between Iran and Israel have spurred European defense spending. <a target="_blank" rel="noreferrer noopener" href="https://www.euronews.com/2024/04/22/military-spending-in-western-and-central-europe-higher-than-end-of-cold-war-data-shows">It increased 16%</a> to €552 billion in 2023, according to the Stockholm International Peace Research Institute (SIPRI).&nbsp;
<figure class="wp-block-image is-resized"><a href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F88161dd1-9665-4388-b5f7-ab4b948e8bec_672x419.png" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F88161dd1-9665-4388-b5f7-ab4b948e8bec_672x419.png" alt="" style="width:624px" /></a><figcaption class="wp-element-caption">European Military Spending, 2023, Source: Stockholm International Peace Institute</figcaption></figure>
<h3 class="wp-block-heading">European Defense Spending Increases After Trump Pressure</h3>
Overall, <a target="_blank" rel="noreferrer noopener" href="https://www.iiss.org/online-analysis/military-balance/2024/07/nato-defence-spending-a-bumper-year/">NATO spending increased by 11% in 2024,</a> compared to 3% in 2023, according to the International Institute for Strategic Studies. Growth was even stronger among NATO's European members, who increased their combined military spending by 19% in real terms in 2024, it said.&nbsp;
NATO countries have accelerated their military expenditures to combat Russian threats in Eastern Europe. They did so after Donald J. Trump criticized them for missing their defense spending commitments.
If the former president wins the US elections today, NATO members worry that Trump may take a hostile or isolationist approach if the alliance's members do not increase spending.
So far, the number of NATO members reaching their 2% of GDP defense spending commitment has increased. Only four NATO members had reached the alliance&#8217;s target in 2017, compared to the 23 expected this year.&nbsp;&nbsp;
<figure class="wp-block-image"><a href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F08fedab7-aff5-4c3a-baac-cead3132afed_681x420.png" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F08fedab7-aff5-4c3a-baac-cead3132afed_681x420.png" alt="" /></a><figcaption class="wp-element-caption">Number of NATO memes meeting 2% commitment, Source: <a target="_blank" rel="noreferrer noopener" href="https://www.nato.int/nato_static_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-2024-en.pdf">NATO</a></figcaption></figure>
Underscoring the European shift, Germany and the United Kingdom signed on October 22 a defense agreement to strengthen security in Europe in "<a target="_blank" rel="noreferrer noopener" href="https://www.gov.uk/government/news/landmark-uk-germany-defence-agreement-to-strengthen-our-security-and-prosperity">the face of growing Russian aggression and increasing threats</a>."&nbsp;
"We must not take security in Europe for granted," German Defense Minister Boris Pistorius <a target="_blank" rel="noreferrer noopener" href="https://www.gov.uk/government/news/landmark-uk-germany-defence-agreement-to-strengthen-our-security-and-prosperity">said</a>. "With projects across the air, land, sea, and cyber domains, we will jointly increase our defense capabilities, strengthening the European pillar within NATO."
The Trinity House Agreement includes a Rheinmetall (OTC:<a class="ticker" href="https://www.benzinga.com/stock/RMBY#OTC">RMBY</a>) artillery gun barrel factory using British steel produced by Sheffield Forgemasters, in the UK. It will support more than 400 jobs and nearly half a billion-pounds boost to the British economy.&nbsp;
<h3 class="wp-block-heading">European Submarine Spending Rises In Dangerous World</h3>
The UK has also bolstered its defense investments with a £560 million contract for the <a target="_blank" rel="noreferrer noopener" href="https://www.gov.uk/government/news/560-million-investment-to-modernise-nuclear-submarine-supporting-more-than-1000-jobs">modernization of HMS Victorious</a>, a Vanguard-class ballistic missile submarine, in March.
Awarded to Babcock International, a leading provider of naval ship support and maintenance, the investment supports the UK's Continuous at Sea Deterrent, a critical component of its national security.
"In an increasingly dangerous world, we must continue to invest in one of our most important assets, our nuclear deterrent," British Defense Secretary Grant Shapps said when the deal was signed.&nbsp;
Poland plans to allocate<a target="_blank" rel="noreferrer noopener" href="https://www.theparliamentmagazine.eu/news/article/as-nato-countries-spend-more-on-defence-poland-leads-by-example#:~:text=%E2%80%9CPoland%20is%20going%20to%20be,until%20we%20have%20enough%20ammo.%E2%80%9D"> 4% of its GDP to military spending by 2024</a>, focusing on acquiring<a target="_blank" rel="noreferrer noopener" href="https://www.trade.gov/country-commercial-guides/poland-defense-industry#:~:text=Overview&amp;text=Poland%20leads%20the%20former%20Eastern,exceed%204%20percent%20of%20GDP."> new naval assets</a> under the reconfigured<a target="_blank" rel="noreferrer noopener" href="https://www.naval-technology.com/news/naval-primes-positioning-for-polands-orka-submarine-programme/?cf-view"> Orka submarine program</a>. This initiative seeks up to four new submarines, with South Korea's Hanwha and the UK's Babcock positioning to meet Poland&#8217;s requirements.
<h3 class="wp-block-heading">European Defense Contractors Benefit From Submarine Spending</h3>
European defense contractors, such as Saab AB, BAE Systems and France's Navel Group, are benefitting from the push to develop European naval capabilities.&nbsp;&nbsp;
Saab (OTC:<a class="ticker" href="https://www.benzinga.com/stock/SAABF#OTC">SAABF</a>) anticipates <a target="_blank" rel="noreferrer noopener" href="https://www.investing.com/news/stock-market-news/earnings-call-saab-reports-robust-q3-growth-plans-us-expansion-93CH-3675919">organic sales growth between 15% to 20%</a> for the year, aiming for the higher end in 2024. The company expects to double production capabilities by late 2025 and maintain a positive operating cash flow by the end of next year.&nbsp;
<a target="_blank" rel="noreferrer noopener" href="https://www.saab.com/newsroom/press-releases/2024/saab-q3-2024-resultsstrong-sales-growth-and-cash-flow">Saab's stock has increased 43% year-to-date</a>, buoyed partly by strong demand for its Saab Kockums submarines and international partnerships.
<figure class="wp-block-image is-resized"><a href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2d06aa0c-c99d-4285-9464-856ee3ec3a93_1552x778.png" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2d06aa0c-c99d-4285-9464-856ee3ec3a93_1552x778.png" alt="" style="width:624px" /></a><figcaption class="wp-element-caption">Saab 12-month stock performance, Source: <a target="_blank" rel="noreferrer noopener" href="https://www.tradingview.com/chart/Fl8iqpOT/?symbol=OMXSTO%3ASAAB_B">TradingView</a></figcaption></figure>
"We have seen an extreme interest now for combat boats in Saab Kockums," CEO Micael Johansson said during the company's third quarter results call. "The mix is nice still in Saab Kockums when it comes to surface activities, the underwater activities, which, of course, mainly the submarines."
<a target="_blank" rel="noreferrer noopener" href="https://www.gov.uk/government/news/uk-firm-appointed-to-build-australian-aukus-submarines">British defense giant BAE Systems</a> (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BAESY#OTC">BAESY</a>) will build Australia's nuclear-powered submarines as part of the AUKUS partnership alongside ASC Pty Ltd.&nbsp; BAE Systems <a target="_blank" rel="noreferrer noopener" href="https://www.baesystems.com/en/article/bae-systems-awarded-92-million-us-navy-contract-for-virginia-class-submarine-propulsors">signed on October 3 a $92 million contract</a> with the US Navy for Virginia-class submarines.&nbsp;
The company's share is up approximately 13% year-to-date.
Disclaimer:
Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. European Capital Insights is not responsible for any financial decisions made based on the contents of this article. Readers may use this article for information and educational purposes only.
This article is from an unpaid external contributor. It does not represent Benzinga&#8217;s reporting and has not been edited for content&nbsp;or&nbsp;accuracy.

RMBY

European Defense Contractors Will Benefit From Global Submarine Demand

RTX Corp.&#39;s (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rtx#NYSE">RTX</a>) business segment, Pratt &amp; Whitney, recently clinched a modification contract for the F-35 fighter jet&#39;s propulsion system. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
<h2>Details of the Deal</h2>
Valued at $111.9 million, the contract is projected to be completed by December 2026. Per the terms of the deal, RTX will offer continued technical engineering, flight test support, special tooling, test equipment repair, as well as flight test spare and repair parts for the F-35 Lightning II Propulsion System Block Four Flight Test Program.
The contract will serve the U.S. Navy, Marine Corps, Air Force and F-35 Cooperative Program Partners. Work related to this deal will be carried out in East Hartford, CT; Edwards Air Force Base, CA; and Patuxent River, MD.
<h2>What&#39;s Favoring RTX Stock?</h2>
As countries ramp up their defense purchases to strengthen their aerial combat readiness, the demand for fighter jets has surged over the past decade. Consequently, the demand for jet engines, particularly those powering advanced fighter jets, is also gaining traction. &nbsp;
The F-35 fighter jet, built by the United States&#39; largest defense contractor, Lockheed Martin (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lmt#NYSE">LMT</a>), plays a key role in many nations&#39; air defense systems. Resultantly, RTX, through its Pratt &amp; Whitney division, which manufactures the F135 engines for the F-35 aircraft, enjoys a steady influx of orders from the U.S. Army and international partners. The latest contract win is a bright example of that.&nbsp;
Notably, LMT&#39;s F-35 program continues to enhance its market reach across the globe, which, in turn, sets the stage for RTX to win more contracts involving the production of the F135 engine and other associated spare parts. Evidently, in July 2024, the Greek government finalized its intention to procure 20 of Lockheed&#39;s F-35 Lightning II aircraft, with an option to obtain another 20. No doubt such orders confirm the integration of RTX-made engines and other related parts in these jets, which, in turn, boosts the company&#39;s revenue growth prospects.
<h2>Will RTX Stock Gain in the Future?</h2>
The U.S. government&#39;s current inventory target consists of 2,456 F-35 aircraft for the U.S. Air Force, Marine Corps and Navy. Moreover, as geopolitical tensions across the globe have prompted a larger number of nations to invest more in strengthening their defense capabilities, the prospects for F-35 outside the United States also remain bright.&nbsp;
Notably, by the 2030s, more than 600 F-35s are anticipated to work together from more than 10 European countries.&nbsp;
Such growth projections for the F-35 fleet across the globe should usher in more order flows for Pratt &amp; Whitney, which, in turn, should provide a substantial boost to RTX&#39;s revenues.
<h2>Opportunities for RTX&#39;s Peers</h2>
Apart from Lockheed and RTX, defense majors that stand to benefit from the expanding F-35 fleet have been discussed below.
Northrop Grumman (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/noc#NYSE">NOC</a>): The company is part of the international partnership involved in building three variants of the F-35 jet. It is engaged in the design and production of the AN/ASQ-242 Communications, Navigation and Identification avionics suite, which can be dynamically programmed to arm the F-35 pilot with multiple-mission capabilities, engineered for seamless transition from one mission phase to the next.
Northrop boasts a (three-to-five years) long-term earnings growth rate of 8.7%. The consensus estimate for NOC&#39;s 2024 sales implies an improvement of 5.4% from the 2023 reported figure.
BAE Systems (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>): This defense major&#39;s short takeoff and vertical landing experience, along with air systems sustainment, supports F-35&#39;s combat capabilities. The company provides an electronic warfare suite for F-35 that includes fully integrated radar warning (targeting support and self-protection) to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for BAESY&#39;s 2024 sales implies an improvement of 36.3% from the 2023 reported figure.
<h2>Price Performance</h2>
In the past year, shares of RTX have rallied 57.6% compared with the industry&#39;s 3.5% growth.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/cf/77122.jpg?v=865311781" />
Image Source: Zacks Investment Research
<h2>Zacks Rank</h2>
RTX currently has a Zacks Rank #3 (Hold).
<a href="https://www.zacks.com/stock/news/2334044/rtx-wins-112m-contract-to-support-f-35-jet-s-propulsion-system?cid=CS-BENZ-FT-analyst_blog|company_news_corporate_actions-2334044">To read this article on Zacks.com click here.</a>

Earnings

Government

Large Cap

News

Contracts

Analyst Ratings

RTX Wins $112M Contract to Support F-35 Jet's Propulsion System

Teledyne Technologies, Inc.&#39;s (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tdy#NYSE">TDY</a>)&nbsp;business unit, Teledyne FLIR Defense, recently won a $20.8 million contract to supply its Star SAFIRE 380-HLD multi-spectral imaging systems. The award has been offered by the Japan Maritime Self-Defense Force.
Within the next three years, Teledyne is expected to supply 10 Star SAFIRE 380-HLD systems as part of the agreement. The company has already shipped one spare unit and two systems to JMSDF for testing and assessment.
<h2>Significance of TDY&#39;s Star SAFIRE 380-HLD</h2>
The Star SAFIRE 380-HLD is an ultra-long-range aerial surveillance system that provides high-definition visual and thermal images to operators. It has excellent picture stabilization and, with its laser designator and rangefinder, delivers extremely precise target localization and laser spot placement.
With its exceptional capabilities, the SS 380-HLD can function in all weather situations. It is the world&#39;s most commonly used imaging system of its kind for intelligence, surveillance, reconnaissance and targeting operations.
<h2>TDY&#39;s Place in Military Thermal Imaging</h2>
With the advancement and integration of technology into larger defense and security systems, military thermal imaging is witnessing increasing demand from military and law enforcement sectors for its enhanced operational capabilities.
This is likely to have prompted the Market Research Future firm to predict that the military thermal imaging market will witness a CAGR of 8.1% during the 2024-2032 period. This market growth prospect is anticipated to bode well for Teledyne, which offers a wide range of thermal imaging systems for military operations.
TDY is a well-known producer of sophisticated technological solutions for the aerospace and defense industries, including thermal imaging systems. These systems are critical for modern military and law enforcement operations, allowing people to detect, identify and engage targets effectively in a variety of environments where visibility is limited or obstructed.
Its product portfolio includes a wide variety of military thermal weapons sights, such as Ranger HRC-MS, Ranger HDC and Ranger MS-UC DefendIR. Such significant products in its portfolio enable Teledyne to witness a stream of order flow like the latest one, which is likely to boost its revenue generation prospects.
<h2>Opportunities for TDY&#39;s Peers</h2>
Apart from Teledyne, other defense majors, who have established themselves in the military thermal imaging business and thus stand to gain from the anticipated expansion of this industry, are as follows:
RTX Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rtx#NYSE">RTX</a>): The company&#39;s Combined Vision System gives pilots the finest possible perspective by combining real-time thermal images from its improved vision system with weather-independent synthetic vision in a single view for advanced situational awareness. It also offers full-view dynamic object identification and eliminates unexpected collisions.
The RTX stock boasts a long-term (three to five years) earnings growth rate of 10.4%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 7% from the previous year&#39;s figure.
BAE Systems (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>): The company&#39;s Thermal Imaging Module TIM 1500 allows the user to see deep into the battlefield, increasing surveillance and target acquisition range and giving the warfighter the capacity to outperform the opponent in battlefield.
The stock boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for BAESY&#39;s 2024 sales implies an improvement of 36.3% from the previous year&#39;s level.
L3Harris Technologies (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lhx#NYSE">LHX</a>): The company&#39;s Infrared Target Acquisition Sight system enhances thermal imaging capabilities in armored combat vehicles, resulting in improved target detection, recognition and identification ranges.
The LHX stock boasts a long-term earnings growth rate of 9.3%. The Zacks Consensus Estimate for L3Harris&#39; 2024 sales implies an improvement of 9.6% from the previous year&#39;s level.
<h2>TDY Stock&#39;s Price Movement</h2>
In the past three months, TDY shares have risen 8.4% compared to the industry&#39;s 5.2% growth.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/d0/76998.jpg?v=147037322" />
Image Source: Zacks Investment Research
<h2>TDY&#39;s Zacks Rank</h2>
Teledyne currently has a Zacks Rank #2 (Buy).
<a href="https://www.zacks.com/stock/news/2333449/teledyne-wins-deal-to-supply-multi-spectral-imaging-systems?cid=CS-BENZ-FT-analyst_blog|company_news_corporate_actions-2333449">To read this article on Zacks.com click here.</a>

Events

Tech

Teledyne Wins Deal to Supply Multi-Spectral Imaging Systems

Textron Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/txt#NYSE">TXT</a>) recently revealed the successful shipment of its Beechcraft T-6C Texan II Operational Flight Trainer (&quot;OFT&quot;) to the Tunisian Air Force. Two Avionics Desktop Trainings, a Computer-Based Training Lab with eight workstations and field services are among the other elements supplied with the OFT.
After all eight Beechcraft T-6C Texan II aircraft are delivered to the Tunisian Air Force, the OFT will be utilized for pilot and maintenance professional training.
<h2>Significance of TXT&#39;s Beechcraft T-6C Texan II</h2>
The Beechcraft T-6C Texan II military training aircraft is a next-generation military trainer jet designed for a wide range of training capabilities, long-term reliability and cost-effective operations.
The Beechcraft T-6C OFT offers a realistic cockpit with real aircraft hardware, a visual system with 70 degrees vertical by 270 degrees horizontal field of view, and a dynamic seat with onset and disturbance queues. These features will support military pilot trainees to get realistic training, making them mission-ready.
<h2>TXT&#39;s Growth Prospects</h2>
Military flight simulators are positioned for considerable expansion, driven by increasing geopolitical tensions worldwide, improvements in technology, increased expenditures on combat jets and the demand for cost-effective training options. Per a report by the Mordor Intelligence firm, the global market for Military Aircraft Simulation &amp; Training is projected to witness a CAGR of 2% between 2024 and 2031. Such growth opportunities offered by the aforementioned market should bode well for Textron in the coming years.
Textron&#39;s business unit, TRU Simulation, focuses on building quality training devices for the business aviation, helicopter and military markets. It develops, manufactures and maintains state-of-the-art, high-fidelity flight training solutions, from classroom training tools to flight training devices and full-motion simulators for defense aircraft. In the latest development in this section, in August 2024, TXT announced the delivery of its Cessna Citation Longitude Full Flight Simulator for FlightSafety International&#39;s Columbus, OH, Learning Center.
Such capabilities of TXT must have enabled the company to win steady orders for its products that support Military Aircraft Simulation &amp; Training, like the latest one.
<h2>Opportunities for TXT&#39;s Peers</h2>
Aerospace companies that are likely to reap the benefits of the growing Military Aircraft Simulation &amp; Training market are as follows:
Lockheed Martin (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lmt#NYSE">LMT</a>): The company&#39;s F-35 Full Mission Simulators are high-fidelity systems that replicate the F-35&#39;s advanced avionics, stealth capabilities and combat systems. It also provides Mission Rehearsal Training solutions and offers high-end training with reduced hardware requirements to train pilots with 5th Generation Tactics, Techniques and Procedures.
Lockheed&#39;s long-term (three to five years) earnings growth rate is 4.7%. The Zacks Consensus Estimate for LMT&#39;s 2024 sales implies an improvement of 5.3% from the prior-year figure.
BAE Systems (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>): Its Hawk advanced jet trainer, equipped with advanced airborne simulation technology and new generation cockpit environment, provides a smoother and more cost-effective transition to the front line. This allows for student pilot and Weapons System Officer output at the most appropriate skill levels in readiness for front-line operations.
BAE Systems has a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for BAESY&#39;s 2024 sales suggests growth of 36.3% from the prior-year reported figure.
RTX Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rtx#NYSE">RTX</a>): Its Joint Secure Air Combat Training System provides the first certified, four-level Multiple Independent Levels of Security test and training equipment in both airborne and ground equipment, allowing for tethered and autonomous operations.
RTX has a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for RTX&#39;s 2024 sales implies growth of 7% from the prior-year reported figure.
<h2>TXT Stock Price Movement</h2>
In the past year, shares of Textron have risen 16.2% against the industry&#39;s decline of 1.4%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/28/75918.jpg?v=1006012060" />
Image Source: Zacks Investment Research
<h2>TXT&#39;s Zacks Rank</h2>
Textron currently carries a Zacks Rank #3 (Hold).
<a href="https://www.zacks.com/stock/news/2328987/textron-ships-its-beechcraft-t-6c-trainer-to-tunisian-air-force?cid=CS-BENZ-FT-analyst_blog|company_news_corporate_actions-2328987">To read this article on Zacks.com click here.</a>

Textron Ships Its Beechcraft T-6C Trainer to Tunisian Air Force

Teledyne Technologies, Inc.&#39;s (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tdy#NYSE">TDY</a>) business unit, Teledyne FLIR Defense, won a $15-million contract to supply more than 150 of its ThermoSight HISS-XLR weapon sights to a NATO partner nation. The award has been offered by the U.S. Army Contracting Command-Aberdeen Proving Ground.
Teledyne has already started the delivery of the aforementioned weapon systems this spring and the remaining shipments will continue through 2024.
<h3>Significance of ThermoSight HISS-XLR</h3>
ThermoSight HISS-XLR is a sighting device that can identify and detect man-size targets that are more than 2,000 meters away. It can be connected with a variety of day scopes and weapon platforms, and is designed to attach to any MILSTD-1913 rail interface in front of an existing sight.
With its exceptional capabilities, the HISS-XLR weapon sight improves mission success for snipers and other long-range shooter requirements.
<h3>Teledyne&#39;s Take on Military Thermal Sights</h3>
TDY is a well-known producer of sophisticated technological solutions for the aerospace and defense industries, including thermal weapon sights. These sights are critical components of modern military and law enforcement operations, allowing people to detect, identify and engage targets effectively in a variety of environments when visibility is limited or obstructed.
Its product portfolio includes a wide variety of military thermal weapon sights, such as THERMOSIGHT HISS-HD, ThermoSight V4000, ThermoSight T75 and MILSIGHT S140-D. Such significant products in its portfolio enable Teledyne to witness a stream of order flow like the latest one, which is likely to boost its revenue generation prospects.
<h3>Growth Prospects</h3>
As technologies advance and become increasingly integrated into larger defense and security systems, military thermal weapon sights are witnessing increasing demand from military and law enforcement sectors for their abilities to provide enhanced operational capabilities.
This might have prompted the Technavio firm to predict that the global military thermal weapon sights market will witness a CAGR of 6.7% over 2024-2028. This should bode well for Teledyne, which offers a wide range of thermal weapon sights for military operations.
Other defense majors, who have established themselves in the military thermal weapon sights business and stand to gain from the anticipated expansion of this industry, are as follows:
Leonardo DRS, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/drs#NASDAQ">DRS</a>): The company&#39;s Improved Night / Day Observation Device Block III thermal weapon sight allows the Special Operations Forces Sniper to see at night and in poor battlefield or weather conditions by simply attaching the device in front of the current day scope. Some of DRS&#39;s other renowned military thermal weapon sights are MINI SEE SPOT, SNIPER PRECISION ACQUISITION RIFLE THERMAL NIGHT SIGHT &ndash; ELEVATOR and a few more.
The DRS stock boasts a long-term earnings growth rate of 16.4%. The Zacks Consensus Estimate for DRS&#39;s 2024 sales indicates an improvement of 6.8% from the previous year&#39;s reported figure.
BAE Systems (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>): The company&#39;s product Enhanced Night Vision Goggle III and Family of Weapon Sight-Individual comes with 12-micron thermal technology that produces sharp thermal images day or night. BAESY&#39;s OASYS product uses the latest uncooled thermal technology to deliver unrivaled thermal imaging and aiming products for the most discerning operators.
The stock boasts a long-term earnings growth rate of 11.9%. The Zacks Consensus Estimate for BAESY&#39;s 2024 sales implies an improvement of 34.6% from the previous year&#39;s reported level.
L3Harris Technologies (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lhx#NYSE">LHX</a>): The company&#39;s Light Weapon Thermal Sight - Long Range is a weapon-mounted thermal sight that can detect long-wave infrared. It can identify targets in harsh situations, including low light and complete darkness.
The LHX stock boasts a long-term earnings growth rate of 9.3%. The Zacks Consensus Estimate for L3Harris&#39; 2024 sales implies an improvement of 9.4% from the previous year&#39;s reported level.
<h3>Price Movement</h3>
In the past three months, TDY shares have fallen 1.3% against the industry&#39;s growth of 6.5%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/68/71119.jpg?v=1864907580" />
Image Source: Zacks Investment Research
<h3>Zacks Rank</h3>
Teledyne currently has a Zacks Rank #4 (Sell).
<a href="https://www.zacks.com/stock/news/2300181/teledyne-tdy-wins-deal-to-supply-thermal-sighting-devices?cid=CS-BENZ-FT-analyst_blog|company_news_corporate_actions-2300181">To read this article on Zacks.com click here.</a>

Teledyne Wins Deal to Supply Thermal Sighting Devices

General Dynamics Corp.&#39;s (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gd#NYSE">GD</a>) business unit, Bath Iron Works, recently clinched a contract to provide planning yard services for its DDG 51 guided-missile destroyer ships. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
<h3>Details of the Deal</h3>
Valued at $202.7 million, the contract is expected to be completed by Jul 31, 2029. Work related to this deal will be carried out in Bath, ME.
The options included in this contract, on being exercised, should bring the cumulative value of this contract to $1.13 billion.
<h3>What&#39;s Favoring General Dynamics?</h3>
Nations across the globe are fortifying their defense spending on military weapons and arsenals as they look to strengthen their defense capabilities. This also includes augmented spending on navy ships for enhanced sea warfare capabilities.
Such increased spending tends to benefit General Dynamics, with its Bath Iron Works business unit being an expert in manufacturing navy ships and providing modernization and lifecycle support for the U.S. Navy.
Notably, General Dynamics&#39; DDG-51 Arleigh Burke-class guided-missile destroyers witness significant demand owing to their wide range of advanced warfighting capabilities in multi-threat air, surface and subsurface environments. These also offer protection against a wide range of threats, including ballistic missiles. Their strong demand is evident from the fact that in 2023, the company won a contract from the Navy for the construction of three Flight III DDG-51 destroyers, with a total of 12 ships in backlog (scheduled for delivery through 2032).
Such strong demand, in tandem with excellence in providing unique capabilities in shipbuilding, must have been boosting GD&#39;s order flows, like the latest one.
<h3>Growth Prospects</h3>
As demand for an efficient security system that can strengthen naval sea warfare capabilities rises, so does the prospect of the naval ship market. This must have encouraged the Mordor Intelligence firm to project that the global naval combat vessels market will witness a CAGR of 6.5% during the 2024-2029 period.
This growth opportunity should boost General Dynamics&#39; operating results as it is one of the prime contractors of navy ships. Notably, GD&#39;s Marine Systems segment is the leading designer and builder of surface combatant and auxiliary ships for the U.S. Navy. The segment also provides comprehensive post-delivery services to modernize and extend the service life of Navy ships. It also maintains the most sophisticated marine engineering expertise in the world to support future capabilities.
Such expertise of GD in manufacturing, as well as providing valuable services for naval combat ships, should usher in more order flows for the company, backed by the growing demand in the naval combat vessels market, like the latest one. Such contract wins should boost GD&#39;s revenue generation prospects in the coming years.
<h3>Peer Opportunities</h3>
GD apart, other defense majors poised to benefit from the expanding naval combat vessels market, on virtue of their strong presence in this space, are discussed below:
BAE Systems (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>): It designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom.
BAESY boasts a long-term earnings growth rate of 12.2%. The Zacks Consensus Estimate for BAE Systems&#39; 2024 sales indicates growth of 34.1% from the 2023 level.
Lockheed Martin (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lmt#NYSE">LMT</a>): The company manufactures Littoral Combat Ships (LCS). Its freedom-variant LCS, USS Nantucket (LCS 27), is a resilient, flexible warship designed to encounter the evolving missions of the U.S. Navy.
Lockheed&#39;s long-term earnings growth rate is 4.1%. The Zacks Consensus Estimate for LMT&#39;s 2024 sales implies an improvement of 3.2% from the 2023 figure.
Huntington Ingalls Industries (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hii#NYSE">HII</a>): Its business segment designs and constructs non-nuclear ships for the U.S. Navy and the U.S. Coast Guard, including amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters.
Huntington&#39;s long-term earnings growth rate is 7.2%. The Zacks Consensus Estimate for HII&#39;s 2024 sales indicates an increase of 2% from the year-earlier level.
<h3>Price Performance</h3>
Shares of General Dynamics have risen 42.9% in the past year against the industry&#39;s 10.4% decline.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/e7/69290.jpg?v=1401938443" /> 
Image Source: Zacks Investment Research
<h3>Zacks Rank</h3>
General Dynamics currently carries a Zacks Rank #3 (Hold).
<a href="https://www.zacks.com/stock/news/2291563/general-dynamics-gd-wins-203m-contract-for-ddg-51-combat-ships?cid=CS-BENZ-FT-analyst_blog|company_news_corporate_actions-2291563">To read this article on Zacks.com click here.</a>

General Dynamics Wins $203M Contract for DDG 51 Combat Ships

Western missile defense capabilities are powerful but can be expensive to maintain against continued enemy fire.
For example, the Standard Missle-2, which the U.S. Navy uses for air defense, costs over $2 million every time it's fired.
In battlefields like the Red Sea and Gulf of Aden, where Houthi rebels have put shipping under a constant aerial barrage, including with drones costing well under $100,000, finding a cheaper defense alternative is economically crucial.
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James Black, an assistant director of defense and security for the RAND Europe think tank, warned of such earlier this year saying, "Low-cost drones and rockets have swung the economic calculus of offense and defense in favor of those using large volumes of cheap unmanned systems and munitions to overwhelm more-sophisticated air and missile defenses."
The United Kingdom shared new footage of its newest laser weapon system, which it calls the DragonFire. The U.K.'s defense minister explained that the video demonstrates "the power of the laser to cut down targets at the speed of light."
Perhaps the biggest breakthrough is its price tag, with the Defense Ministry estimating the price of a 10-second burst of the laser to only cost $13, leading it to call it a "potential game-changer for air defense."
Trending: Fortnite&#8217;s creator company<a href="https://www.benzinga.com/money/epic-games"> greenlights partial ownership for up to 100 accredited investors</a> in the upcoming series.
Companies involved in the collaboration of the new laser weapon include MBDA UK, BAE Systems (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BAESY#OTC">BAESY</a>), QinteQ Group (OTC:<a class="ticker" href="https://www.benzinga.com/stock/QNTQF#OTC">QNTQF</a>), Arke and Leonardo (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FINMY#OTC">FINMY</a>).
Leonardo, an Italian multinational specializing in aerospace, defense and security, has seen strong stock price performance lately, with its stock up about 105% in the past year.
While the device is still in the research and development stage, business could continue to boom for these companies if Ukraine can get access to this new technology.
Even though the British currently have no known plans to deploy the technology to Ukraine, some Ukrainians have already expressed interest.
"We are ready to test it," Ukrainian MP Oleksiy Goncharenko told Newsweek.&nbsp;
With the ever-high geopolitical tensions around the world and the U.S. government debt approaching $35 trillion, finding more cost-effective ways to succeed in combat would be welcome news.
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QNTQF

New 'Game-Changing' Laser Weapon Costing $13 A Shot Could Disrupt Defense Industry — Here Are The Public Companies Behind It

In retaliation for the latest U.S. arms sales to Taiwan, China has announced sanctions against five American military manufacturers. This move comes amid rising tensions between Beijing and Washington, just days before Taiwan&#8217;s critical elections.
What Happened: A Chinese foreign ministry spokesperson on Sunday revealed that sanctions will be imposed on five U.S. military manufacturers, Reuters reported. The companies facing sanctions are BAE Systems Land (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BAESY#OTC">BAESY</a>) and Armaments, Alliant Techsystems Operations (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ATK#NYSE">ATK</a>), AeroVironment (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVAV#NASDAQ">AVAV</a>), Viasat (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VSAT#NASDAQ">VSAT</a>), and Data Link Solutions. The sanctions will involve freezing the assets of these firms and prohibiting any transactions or dealings with them by individuals or organizations in China.
These sanctions come in response to the recent <a href="https://www.benzinga.com/news/23/12/36357401/us-accelerates-f-16-delivery-to-taiwan-amid-rising-tensions-with-china">U.S. arms sales to Taiwan</a>, which China claims infringe upon its sovereignty and security interests. The U.S. State Department approved a $300 million sale of equipment aimed at maintaining Taiwan&#8217;s tactical information systems, a move that China strongly opposes. This controversy adds to the ongoing tensions between the two superpowers over the status of Taiwan.
See Also: <a href="https://www.benzinga.com/news/24/01/36523251/donald-trump-suggests-supreme-court-justices-he-appointed-could-go-out-of-their-way-to-hurt-him-in-c" target="_blank" rel="noreferrer noopener">Donald Trump Suggests Supreme Court Justices He Appointed Could &#8216;Go Out Of Their Way&#8217; To Hurt Him In Colorado Appeal: &#8216;I&#8217;ve Never Seen Anything Like It&#8217;</a>
Notably, the timing of the sanctions is significant, as they coincide with Taiwan&#8217;s upcoming presidential and parliamentary elections scheduled for Jan. 13. China has framed these elections as a decisive moment, with implications for the island&#8217;s future and the potential for conflict in the region.
The U.S. Embassy in Beijing has yet to respond to the announcement.
Why It Matters: This latest development comes amid a series of escalating tensions between the U.S. and China. Beijing has long <a href="https://www.benzinga.com/news/23/12/36393297/xi-jinping-says-reunification-will-surely-be-realized-will-resolutely-prevent-anyone-from-splitting">considered Taiwan as a part of its territory</a>, a claim that is strongly refuted by the Taiwanese government. The U.S. has been a consistent supporter of Taiwan, providing military aid and equipment to the island.
These sanctions also follow a recent report of a <a href="https://www.benzinga.com/news/24/01/36526274/xi-jinping-purges-military-following-reports-of-missiles-filled-with-water-instead-of-fuel">significant military purge in China</a>, reportedly due to widespread corruption within the country&#8217;s military establishment, including its Rocket Force and defense industrial base. This development has raised concerns about the integrity of China&#8217;s military capabilities.
Furthermore, Chinese President Xi Jinping has been vocal about the<a href="https://www.benzinga.com/markets/asia/24/01/36464333/xi-jinping-official-urges-correct-choice-for-peace-in-lead-up-to-crucial-taiwanese-elections"> importance of the upcoming Taiwanese elections</a>, positioning them as a crucial moment for the region&#8217;s peace and stability. A top official from the Association for Relations Across the Taiwan Strait recently urged Taiwan to make the &#8220;correct choice&#8221; ahead of the elections, emphasizing the significance of the vote.
Read Also: <a href="https://www.benzinga.com/news/24/01/36526355/in-lead-up-to-2024-election-trump-shares-strange-fan-made-video-that-claims-god-gave-us-trump">In Lead-up To 2024 Election, Trump Shares Strange Fan-made Video That Claims &#8216;God Gave Us Trump&#8217;</a>
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AVAV

VSAT

China To Sanction US Defense Manufacturers Over Taiwan Arms Sales

Several major investors are reportedly advocating for&nbsp;BP&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bp#NYSE">BP</a>) to consider appointing an external candidate as its CEO, marking a potential departure from the company&#39;s tradition of<a class="editor-rtfLink" href="https://www.benzinga.com/markets/equities/23/09/34526407/oil-giant-bps-ceo-resigns-amid-investigation-on-personal-conduct" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">&nbsp;internal appointments throughout its 114-year history.</a>
BAE Systems PLC (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) Chief Executive Charles Woodburn is a strong contender for the position, Sky News&nbsp;<a class="editor-rtfLink" href="https://news.sky.com/story/bp-investors-want-oil-behemoth-to-target-bae-chief-as-ceo-13043017" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">reported</a>, citing his successful leadership during his six-and-a-half years at BAE and extensive prior experience at oilfield services firms&nbsp;Schlumberger N.V.&nbsp;and&nbsp;Expro Group Holdings N.V.
This weekend, it remained uncertain whether Woodburn had received a formal approach from BP or headhunters representing the company, the report read. However, multiple sources indicated that he had been informally approached in the past few weeks, Sky News added.
In response, a BAE spokesperson told Sky News on Saturday, &quot;Charles is chief executive of BAE Systems, and we have no comment on BP personnel matters.&quot;
BP has been actively searching for a new CEO following Bernard Looney&#39;s departure in September due to his misleading the board about personal relationships with colleagues.
Murray Auchincloss, the interim CEO&nbsp;and former chief financial officer under Looney, is considered a top candidate for the permanent position.
BP&#39;s incoming CEO faces a pivotal choice on whether to continue Looney&#39;s strategy of&nbsp;focusing on carbon emission reductions, renewables&nbsp;and cleaner fuels.
The decision comes as BP, with a market capitalization of $102.236 billion, dwarfs BAE Systems, valued at nearly $45.313 billion.
Price Action:&nbsp;BP shares closed higher by 0.76% to $36.03 on Friday.
Read Next:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/markets/equities/23/09/34651928/dismantling-petro-masculinity-can-bp-challenge-big-oils-legacy-of-hiring-male-ceos" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">Dismantling Petro-masculinity: Can BP Challenge Big Oil&#39;s Legacy Of Hiring Male CEOs?</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock
&nbsp;

Equities

Small Cap

BP CEO Hunt: Investors Push For External Candidate, BAE's Woodburn Reportedly In Spotlight

On Thursday, British defense company&nbsp;BAE Systems&nbsp;PLC&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) announced signing an agreement with the U.S. Army for M777 lightweight howitzer major structures under an Undefinitized Contract Action (UCA),&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/pressreleases/24/01/n36487246/u-s-army-signs-agreement-with-bae-systems-for-new-m777-structures" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">which is currently limited to $50 million.</a>
BAE Systems will work with its supply chain in the U.K. and the U.S. to manufacture M777 titanium structures, which form the basis of the gun.&nbsp;
The company has seen an increase in interest from across Europe, Asia, and the Americas in the M777 gun system, creating an opportunity for a restart of M777 production in the U.K.&nbsp;
&quot;This restart of production of the major structures for the U.S. Army&#39;s M777s comes at a critical time, with howitzers deployed on operations in Ukraine,&quot; said John Borton, vice president and general manager of BAE Systems Weapons Systems UK.
This artillery piece, last ordered five years ago, is seeing renewed interest due to its battlefield effectiveness in the ongoing Ukraine conflict,&nbsp;<a class="editor-rtfLink" href="https://www.wsj.com/world/u-s-and-bae-to-bring-back-popular-howitzer-after-success-in-ukraine-0f1249ec?mod=hp_lead_pos4" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">reported&nbsp;</a>the Wall Street Journal.
BAE Systems anticipates future contracts for complete M777 guns, as inquiries from over eight countries have increased since the war&#39;s inception, as per the report.
The M777 howitzer, despite needing to be towed into position, has gained preference for its reliability, ease of use, and simple repair process compared to more nimble self-propelled howitzers, the report added.
&quot;The M777 will remain at the forefront of artillery technology well into the future through the use of technical insertions, long-range precision guided munition developments, and flexible mobility options,&quot; Borton added.
Price Action: BAESY shares closed higher by 2.26% at $58.55 on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Company

Media

BAE Systems Revives M777 Howitzer Production: Secures US Army Contract Amid Growing Global Demand

On Tuesday, the U.S. Department of Commerce announced the first CHIPS Act award of&nbsp;<a class="editor-rtfLink" href="https://www.commerce.gov/news/press-releases/2023/12/biden-harris-administration-and-bae-systems-inc-announce-chips" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">$35 million</a>&nbsp;to&nbsp;BAE Systems Plc&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesf#OTC">BAESF</a>), a British aerospace firm.
This grant will enable BAE&#39;s Nashua, New Hampshire facility to quadruple the production of chips necessary for critical defense programs, including the F-35 fighter jet program. Commerce Secretary Gina Raimondo announced the grant in New Hampshire, emphasizing its role in reducing dependency on Asian countries for advanced semiconductors and marking a new phase in the U.S. chips effort, Bloomberg&nbsp;<a class="editor-rtfLink" href="https://www.bloomberg.com/news/articles/2023-12-11/us-awards-35-million-to-defense-firm-bae-in-first-chips-grant?sref=TBDibEcD" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">reports</a>.
Also Read:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/government/23/12/36172347/new-yorks-10b-gamble-can-it-become-the-next-big-hub-in-the-global-chip-race" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">New York&#39;s $10B Gamble: Can It Become the Next Big Hub in the Global Chip Race?</a>
Raimondo mentioned the grant as relatively small compared to plans, with expectations of 10 to 12 more significant announcements next year. The&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/government/23/11/35637540/whats-going-on-with-intel-stock-tuesday" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">Chips Act supports</a>&nbsp;bringing chip manufacturing back to the U.S. and has catalyzed over $230 billion in private investment from significant semiconductor companies, the report added. These investments are often contingent on government support.
The grant to BAE is tied to meeting production and pricing goals over the next few years, allowing BAE to upgrade its equipment and reduce chip costs. The U.S. focuses on structuring deals to minimize government funding while making domestic projects viable, competing with international subsidy offers. The report further noted that the BAE&#39;s Nashua facility is a crucial part of the Defense Department&#39;s secure semiconductor supply chain for the military.
Citi&nbsp;analyst Christopher Danely continues to expect&nbsp;Intel Corp&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/intc#NASDAQ">INTC</a>) and&nbsp;Micron Technology, Inc&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/mu#NASDAQ">MU</a>) to be the biggest beneficiaries of CHIPS act money as contingencies - such as buyback limitations, profit sharing, preference for union labor - tied to the CHIPS act make them unattractive to highly profitable chip makers.&nbsp;
The analyst noted these conditions could render the goal of bringing leading-edge semiconductor manufacturing back to the U.S. complicated, given higher costs and regulations, and are causing many companies to stay below the $150 million threshold.&nbsp;
Price Actions:&nbsp;MU shares traded higher by 2.57% at $80.17, and INTC shares traded higher by 1.26% at $44.60 on the last check Wednesday.
Photo Via Company

Analyst Color

Regulations

BAESF

INTC

Citi Analyst Predicts Intel And Micron As Biggest Beneficiaries In US CHIPS Act Push, Despite Regulatory Hurdles

BAE Systems plc&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesf#OTC">BAESF</a>) has&nbsp;<a class="editor-rtfLink" href="https://www.baesystems.com/en/article/3-95bn-awarded-for-next-phase-of-aukus-submarine-programme" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">secured&nbsp;</a>&pound;3.95 billion in funding for the progression of the SSN-AUKUS project, the U.K.&#39;s next-generation nuclear-powered attack submarine program.
The SSN-AUKUS submarines are set to be the most formidable and technologically advanced in the Royal Navy&#39;s fleet.
The submarines, replacing the Astute class, will be constructed at BAE Systems&#39; facility in Barrow-in-Furness, Cumbria.
In March, leaders from the three nations unveiled the AUKUS agreement, a strategic alliance aimed at fostering deeper military cooperation. Under this pact, the SSN-AUKUS submarines will integrate cutting-edge technologies from all participating countries, enhancing their collective defense capabilities.
The &pound;3.95 billion funding allocation will not only facilitate the detailed design phase and procurement of essential components but also generate employment for over 5,000 individuals, marking a notable economic uplift for the region.
BAE Systems&rsquo; Submarines business plays a vital role in the U.K. economy, particularly in the north west of England. By the end of this year, its workforce will grow to 12,500, including around new 900 apprentices and graduates.
Price Action:&nbsp;BAESY shares closed lower by 2.04% at $49.45 on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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BAE Systems Secures £3.95B Funding For Next Phase Of AUKUS Submarine Program

Elbit Systems Ltd&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/eslt#NASDAQ">ESLT</a>) disclosed winning a contract from&nbsp;BAE Systems PLC&#39;s&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) H&auml;gglunds<a class="editor-rtfLink" href="https://www.benzinga.com/pressreleases/23/09/n34426330/elbit-systems-awarded-109-million-contract-by-bae-systems-h-gglunds-to-supply-iron-fist-active-pro" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">&nbsp;worth $109 million</a>.
As per the terms, ESLT will supply an Iron Fist Active Protection System for the CV90 Platform for a European customer. The contract duration is over three years.
&quot;Recent conflicts have shown that armored fighting vehicles and tanks face an increased danger to forces on the battlefield. the Iron Fist has been proven to be effective against a range of threats including kinetic energy rounds and drones, neutralizing them far from troops inside combat fighting vehicles,&quot; said Yehuda (Udi) Vered, General Manager of Elbit Systems Land.
Last week, Collins Elbit Vision Systems (CEVS), a joint venture between Collins Aerospace, an&nbsp;RTX Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rtx#NYSE">RTX</a>) business, and Elbit Systems has secured a $16 million&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/markets/equities/23/09/34310712/rtx-elbit-jv-bags-16m-contract-for-improved-pilot-helmet-mounted-display-systems" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">contract from the U.S. Navy</a>.
Also Read:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/markets/equities/23/09/34226824/elbit-systems-bags-200m-contracts-from-european-customer" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">Elbit Systems Bags $200M Contracts From European Customer</a>
Price Action:&nbsp;ESLT shares closed higher by 0.24% at $199.15 on Friday.

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ESLT

Elbit Systems Wins $109M Contract From BAE Systems Hägglunds

Elbit Systems Bags $109M Contract By BAE Systems Hägglunds To Supply Iron Fist Active Protection System

<ul>
<li>Lockheed Martin Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lmt#NYSE">LMT</a>) and the F-35 Joint Program Office (JPO)&nbsp;<a class="editor-rtfLink" href="https://www.baesystems.com/en/article/lockheed-martin-and-f-35-joint-program-office-sign--147-million-contract-for-f-35-lightning-ii-fleet-support?_gl=1*byqmhu*_ga*MTYyOTI1NzkxMi4xNjgwNjAyMjg3*_ga_YYPH7DRRQF*MTY4MDYwMjI4Ny4xLjAuMTY4MDYwMjI4Ny4wLjAuMA..&amp;_ga=2.56576363.1586045486.1680602287-1629257912.1680602287" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">signed</a>&nbsp;the Lightning Air System National Capability Enterprise (LANCE) 23-27 contract to support the United Kingdom&rsquo;s F-35 fleet.&nbsp;</li>
<li>The contract is valued at ~&pound;147 million and will ensure and enhance the UK F-35 fleet&rsquo;s availability and capability to conduct combat missions worldwide.</li>
<li>BAE Systems&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) will serve as the primary subcontractor to Lockheed Martin, providing most personnel at Royal Air Force (RAF) Marham and in deployed locations as required.</li>
<li>The contract will secure more than 140 U.K. jobs, mainly at RAF Marham, with additional roles contracted within the maintenance teams on site.</li>
<li>BAE Systems was&nbsp;<a class="editor-rtfLink" href="https://www.baesystems.com/en/article/manufacturing-advanced-block-4-f-35-electronic-warfare-systems-to-defeat-evolving-threats?_gl=1*6c6tgh*_ga*MTYyOTI1NzkxMi4xNjgwNjAyMjg3*_ga_YYPH7DRRQF*MTY4MDYwMjI4Ny4xLjEuMTY4MDYwMjI5NC4wLjAuMA..&amp;_ga=2.56576363.1586045486.1680602287-1629257912.1680602287" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">awarded&nbsp;</a>$491 million in contracts from LMT to produce state-of-the-art Block 4 electronic warfare (EW) systems for future Lot 17 F-35 Lightning II fighter jets.</li>
<li>The powerful Block 4 systems will accelerate the delivery of advanced EW capabilities to warfighters by combining adaptable hardware and incremental software updates.</li>
<li>Price Action:&nbsp;LMT shares closed higher by 2.94% at $486.62 and BAESY higher by 1.44% at $50.08 on Monday.</li>
</ul>

Lockheed Martin, F-35 Joint Program Office Ink £147M Contract To Support UK's F-35 Fleet

<ul>
<li>British Prime Minister Rishi Sunak extended his support for Ukraine at the G20 summit while confirming a long-planned order for warships from&nbsp;BAE Systems plc&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesf#OTC">BAESF</a>).</li>
<li>&quot;Russia&#39;s actions put all of us at risk,&quot; he said at the summit in Bali, Indonesia. &quot;As we give the Ukrainian people the support they need, we are also harnessing the breadth and depth of UK expertise to protect ourselves and our allies.&quot;</li>
<li>Sunak also announced a &pound;4.2 billion ($4.94 billion) contract to BAE Systems to build five ships for the Royal Navy, a government statement said.</li>
<li>In addition to the three ships already under construction, the contract comes as the next phase in the Type 26 frigate program, and all eight of the Type 26 frigates are expected to be completed by the mid-2030s, Reuters reported.</li>
<li>In a market&nbsp;<a class="editor-rtfLink" href="https://otp.tools.investis.com/clients/uk/bae_systems2/rns/regulatory-story.aspx?cid=288&amp;newsid=1644435" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">update</a>, BAE Systems said that with &pound;18 billion secured in the first half, the company secured a further &pound;10 billion since the half year.</li>
<li>The company said it is working through ongoing supply chain challenges, especially in those business areas reliant on microelectronics.</li>
<li>Consistent with guidance, BAE continues to drive top-line growth and margin expansion despite the various headwinds but does not see a material impact from higher energy prices.</li>
</ul>

UK's Newly Elected Prime Minister Rishi Sunak Awards $4.9B Contract To BAE Systems, Extends Support To Ukraine

<ul>
<li>Lithium-ion battery provider&nbsp;Amprius Technologies, Inc&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ampx#NYSE">AMPX</a>) forged a three-year cooperation agreement with&nbsp;BAE Systems PLC&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesf#OTC">BAESF</a>) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>).</li>
<li>Amprius will initially work with BAE Systems&#39; Air business, delivering its lightweight high-energy batteries specifically developed for electrically&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/pressreleases/22/10/b29396156/amprius-technologies-inc-and-bae-systems-enter-into-a-three-year-cooperation-agreement" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">powered flight applications</a>.</li>
<li>Both parties agreed to investigate business opportunities enabled by using and supplying Amprius&#39; silicon nanowire anode batteries for electric products developed by BAE Systems in the U.K.</li>
<li>Amprius CEO Dr. Kang Sun said, &quot;BAE Systems is at the technological forefront of the defense industry, and this agreement validates the potential of our silicon nanowire anode technology for rigorous aerial applications. We look forward to working with the BAE Systems team to advance the development of their electric products.&quot;</li>
<li>&quot;Amprius&#39; innovative silicon nanowire anode battery cells have the potential to deliver exceptional performance, and so we&#39;re keen to work with them to explore opportunities for the electric products that we&#39;re developing for military applications,&quot; said Dave Holmes, Advanced Projects, Technology, and Manufacturing Director at BAE Systems&#39; Air.</li>
<li>In October, Amprius won a $50 million cost-sharing grant from the U.S. Department of Energy&#39;s Office of Manufacturing and&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/small-cap/22/10/29330635/why-amprius-technologies-shares-are-exploding-higher-today" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">Energy Supply Chains</a>.</li>
<li>The funding from President Biden&#39;s Bipartisan Infrastructure Law will help it to expand domestic manufacturing of batteries for electric vehicles and the electrical grid.</li>
<li>Price Action:&nbsp;AMPX shares traded lower by 3.95% at $11.19 on the last check Tuesday.</li>
</ul>

AMPX

BAE To Leverage Amprius' Lightweight EV Batteries For Flight Applications

<ul>
<li>BAE Systems PLC&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/baesy#OTC">BAESY</a>) and&nbsp;General Electric Co&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ge#NYSE">GE</a>) have&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/pressreleases/22/07/b28114118/ge-and-bae-systems-collaborate-to-explore-next-generation-adaptive-power-systems-for-combat-air-ap" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">established a technical partnership&nbsp;</a>to explore next-generation adaptive power management systems in the Combat Air domain.</li>
<li>GE has delivered electrical power demonstration equipment into the BAE Systems lab to start exploring how to adopt and use solid state power controllers.</li>
<li>&ldquo;We&rsquo;re proud to collaborate with BAE Systems to explore the next generation of Combat Air technologies building upon our existing relationship on the Tempest program,&rdquo; stated Joe Krisciunas, president of Electrical Power Systems for GE.</li>
<li>Also Read:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/22/07/28109273/heres-what-general-electrics-3-new-units-will-be-called-ahead-of-historic-spin-off" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">General Electric Reveals What Its 3 New Units Will Be Called, Ahead Of Historic Spin-Off</a></li>
<li>GE said it is working with BAE Systems to show how adaptive power management technology could enable the increased operational capability for Combat Aircraft.</li>
<li>Price Action:&nbsp;GE shares are trading higher by 4.51% at $66.53 and BAESY higher by 0.84% at $39.06 on the last check Tuesday.</li>
</ul>

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