Tensions between the United States and Iran are at a new high after Iran launched 15 ballistic missiles at US forces in Iraq on Tuesday, January 7.
This attack on two military bases was an act of retaliation for a drone attack commissioned by US President Donald Trump in Iraq at the end of last week, killing Iranian military commander Qassem Soleimani, generally regarded as the second most powerful figure behind Supreme Leader Ayatollah Ali khamenei.
Even before Iran responded to the drone attack, the US imported around 4,500 soldiers, as well as a wide range of ships, planes, and other weapons in the region.
Further escalation in the US-Iran conflict would probably benefit the prices of these three shares in the defense sector:
1. Raytheon: largest guided rocket producer
Raytheon (NYSE 🙂 is the fourth largest military contractor and an industrial company with nuclear concentrations in the production of weapons, military and commercial electronics. The defense giant saw its 2018 rise to $ 27.1 billion, of which 87% came from arms sales and defense contracts.
With the hostility between Washington and Tehran threatening to turn into a complete war, it makes sense that this important American defense contractor is on our radar.
The Waltham, Massachusetts-based company is the largest producer of guided missiles and a leading manufacturer of missile defense systems. Raytheon's portfolio includes radars and ballistic missile interceptors, such as the Patriot missile system. It also makes a wide range of air-to-surface, surface-to-air, air-to-air and surface-to-surface precision guided missiles.
Raytheon has a market capitalization of $ 63.3 billion and shares closed at $ 226.54 on Tuesday, not far from the recent record high of $ 232.43 on January 6.
The technology and innovation leader then reports earnings on January 24. Consensus calls for earnings per share (earnings per share) of $ 3.12 for the fourth quarter, an increase of 6% over earnings of $ 2.93 per share in the same period a year ago. Turnover is expected to increase by 8% compared to the same period a year earlier to $ 7.98 billion.
2. Lockheed Martin: Leading F-35 Fighter Jet Manufacturer
Lockheed Martin (1945, headquarters in Bethesda, NY, 🙂 Maryland is by far the largest defense contractor in the world and the primary supplier of the Pentagon. The space and defense juggernaut saw its annual sales in 2018 at $ 53.8 billion, 88% of which came from the sale of military services.
It is no surprise that Lockheed Martin has made our list, given its position as a global production leader for a wide range of military services, including fighter jets, combat ships, hypersonic missiles and missile defense systems. The company achieved sales of $ 53.8 billion in 2018, most of the aviation and defense companies.
Lockheed is best known as the developer and manufacturer of a wide range of military aircraft, including the F-16, F-22 and F-35 fighter jets, of which the US Army is the primary buyer. The F-35 fighter jet is Lockheed's largest growth factor and accounts for approximately one third of the company's total turnover.
Yesterday ended at $ 414.50, in view of their peak of $ 417.00 on January 6. The company has a market capitalization of $ 116.5 billion.
The hornbeam is expected to report the results of the fourth quarter on January 23. Consensus estimates ask the company to make a profit of $ 5.04 per share, while revenue is expected to grow by around 6% from the same quarter a year earlier to $ 15.25 billion.
3. Northrop Grumman: Major Player In Global Drone Market
Northrop Grumman (1945) based in Hawthorne, California, is the third largest weapon manufacturer and military service provider. The company raised $ 30.1 billion, of which 84% came from defense contracts.
As a major subcontractor to the Lockheed F-35 and producer of drones such as the Global Hawk, Northrop Grumman is well positioned to take advantage of increased tensions in the Middle East.
The space company has the largest share in the drone market and makes the RQ-180 stealth drone, which can dodge radar, as well as the $ 120 million RQ-4 Global Hawk, which can reach up to 60,000 feet. In addition, the company is known for its B-2 stealth bomber line and is leading the development of the B-21 Raider – a long-distance stealth bomber capable of supplying conventional and thermonuclear weapons.
Shares paid last night at $ 374.97, just below their record high of $ 383.89 scaled on September 26. Northrop Grumman has a valuation of $ 63.2 billion.
The global security provider is expected to publish the fourth quarter results on January 30. Consensus requires earnings per share of $ 4.77, while revenue is expected to increase by around 8% over the same period a year earlier to $ 8.85 billion.
