Al Root
Rearmament is a theme for the U.S. military amid ongoing fighting in the Middle East, which means investors can focus on companies that supply missiles and bombs.
Thursday, Melius analyst Scott Mikus upgraded shares of RTX to Buy from Hold on " Epic Fury tailwinds." His price target went to $242 from a recent $232.
"Given the need to replace missiles, missile interceptors, damaged radars, aircraft, and other equipment used in Operation Epic Fury, we are raising our estimates and price targets for the large defense primes, " he wrote.
He also raised his target price on Lockheed Martin stock to $691 from $651, which he rates Hold; increased his target price to $415 from $414 of General Dynamics stock, which he rates Buy; and hiked his Northrop Grumman price target to $798 from $733, rating the stock Hold.
Those four companies, plus Boeing, make a variety of missiles and warheads for the Defense Department. Other companies, including L3Harris Technologies, make components for missiles. Recently, the Defense Department announced agreements with multiple makers, including RTX, to dramatically increase missile production in the coming years.
"We see margin tailwinds for defense contractors as they move past stale-priced contracts and receive awards for mature production programs that are margin accretive," added Mikus.
Rising defense spending can also offset any weakness in RTX's commercial aerospace business that arises from higher oil prices.
RTX stock was down 0.4% at $193.91 in early trading, while the S&P 500 and Dow Jones Industrial Average were off 1.5% and 1.4%, respectively. Most stocks were down after President Donald Trump's Wednesday address, which didn't offer much new detail on the fighting in Iran. Benchmark oil prices were up 8%.
Overall, 56% of analysts covering RTX stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% to 60%.
The average analyst price target for RTX stock is about $220 a share.
Coming into Thursday trading, RTX stock was up 47% over the past 12 months. Boeing, General Dynamics, Lockheed, and Northrop shares have gained an average of 32% in that span.
Investors have caught on to the trends of higher defense spending and missile stockpiling. Now, the question is: How good can things get for the prime contractors?
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 02, 2026 10:43 ET (14:43 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments