The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through Commercial Airplanes; Defense, Space & Security; and Global Services segments. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for passenger and cargo requirements, as well as provides fleet support services. The Defense, Space & Security segment engages in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems; strategic defense and intelligence systems, which include strategic missile and defense systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions, and intelligence systems; and satellite systems, such as government and commercial satellites, and space exploration. The Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers. The Boeing Company was incorporated in 1916 and is based in Arlington, Virginia.

Boeing Company (The)

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Boeing Co. (Symbol: BA), where a total volume of 129,410 contracts has been traded thus far today, a contract volume which is representative of approximately 12.9 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 181.6% of BA's average daily trading volume over the past month, of 7.1 million shares. Particularly high volume was seen for the $225 strike put option expiring August 29, 2025, with 8,220 contracts trading so far today, representing approximately 822,000 underlying shares of BA. Below is a chart showing BA's trailing twelve month trading history, with the $225 strike highlighted in orange:
Target Corp (Symbol: TGT) options are showing a volume of 124,758 contracts thus far today. That number of contracts represents approximately 12.5 million underlying shares, working out to a sizeable 174.4% of TGT's average daily trading volume over the past month, of 7.2 million shares. Particularly high volume was seen for the $100 strike call option expiring August 22, 2025, with 20,353 contracts trading so far today, representing approximately 2.0 million underlying shares of TGT. Below is a chart showing TGT's trailing twelve month trading history, with the $100 strike highlighted in orange:
And Home Depot Inc (Symbol: HD) saw options trading volume of 46,245 contracts, representing approximately 4.6 million underlying shares or approximately 133.9% of HD's average daily trading volume over the past month, of 3.5 million shares. Particularly high volume was seen for the $405 strike call option expiring August 22, 2025, with 2,205 contracts trading so far today, representing approximately 220,500 underlying shares of HD. Below is a chart showing HD's trailing twelve month trading history, with the $405 strike highlighted in orange:
For the various different available expirations for BA options, TGT options, or HD options, visit StockOptionsChannel.com.
Also see:
Institutional Holders of GL
SYNC Insider Buying
Top Ten Hedge Funds Holding DSPY
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Friday Option Activity: BA, TGT, HD

As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money. So let's look at two noteworthy recent insider buys.
At Boeing, a filing with the SEC revealed that on Tuesday, Director Mortimer J. Buckley bought 2,200 shares of BA, for a cost of $226.10 each, for a total investment of $497,420. Boeing is trading up about 3.2% on the day Friday. This buy marks the first one filed by Buckley in the past twelve months.
And at Prairie Operating, there was insider buying on Wednesday, by Jonathan H. Gray who bought 218,917 shares at a cost of $2.09 each, for a trade totaling $457,537. Before this latest buy, Gray made one other buy in the past year, purchasing $493,112 shares for a cost of $3.75 a piece. Prairie Operating is trading up about 7.2% on the day Friday. So far Gray is in the green, up about 20.1% on their buy based on today's trading high of $2.51.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Friday 8/22 Insider Buying Report: BA, PROP

Rocket Lab USA, Inc. (RKLB) is steadily moving forward with its next-generation Neutron rocket, designed to compete in the medium-lift reusable launch market. Unlike the small-satellite-focused Electron, Neutron will carry heavier payloads, making it suitable for large satellite constellations, national security missions and deep-space programs.
In July 2025, RKLB selected Bollinger Shipyards to build a 400-foot ocean platform for Neutron’s landing. This landing platform should play a crucial role in this rocket’s entry into the medium-lift launch market.
Looking ahead, the launch of the Neutron rocket is expected in the second half of 2025, with its flight hardware being moved to its launch site recently.
Currently, the large structures that make up the first stage of the Neutron are undergoing major structural tests, which upon completion, will allow the rocket to progress into a final integration and stage testing.
Once launched, the Neutron rocket will allow the company to compete for larger missions and higher-value contracts against major players in the space industry.
Other Stocks to Keep on the Watchlist
The space launch services market is witnessing steady growth, supported by several factors such as rapid advancements in technology, the rising need for satellite deployment, increasing commercial space activity and higher investment in space infrastructure.
These drivers are creating growth opportunities for other space stocks like Boeing (BA) and Lockheed Martin (LMT), which already have a well-established presence in the launch services market.
Through their joint venture, United Launch Alliance (ULA), LMT and BA have provided reliable access to space for nearly two decades. Since its formation in 2006, ULA has delivered more than 150 Atlas and Delta rockets for commercial, scientific and defense missions, underscoring its reputation as a dependable launch provider.
To strengthen its position in the evolving market, ULA recently launched the Vulcan rocket, which offers more affordable and flexible launch options, making it suitable for a wide variety of missions.
RKLB’s Price Performance, Valuation and Estimates
Shares of RKLB have gained 496.7% in the past year compared with the industry’s 35.8% growth.
Image Source: Zacks Investment Research
The company shares are expensive on a relative basis, with its forward 12-month Price/Sales being 26.09X compared with its industry’s average of 10.17X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RKLB’s 2025 and 2026 losses has improved over the past 60 days.
Image Source: Zacks Investment Research
RKLB stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Rocket Lab's Neutron Progressing Steadily Toward Launch

Key Points
The investment adviser added 418,477 shares of Hexcel at an estimated trade value of $22 million, based on second quarter's average price.
Hexcel now accounts for 1.3% of the fund's 13F assets, valued at $290.4 million as of June 30, 2025.
What happened
According to a recent SEC filing dated August 15, 2025, EARNEST Partners LLC increased its position in Hexcel Corporation (NYSE:HXL) by 418,477 shares during the quarter. The estimated transaction value, based on the quarterly average share price, was $22.13 million.
The fund's total holdings in Hexcel were 5,140,542 shares as of June 30, 2025, with a reported market value of $290.39 million as of June 30, 2025.
What else to know
The transaction lifted Hexcel to 1.3% of EARNEST Partners LLC's 13F assets.
Top holdings after the filing:
CBRE Group: $496.38 million (2.24% of AUM)
Reinsurance Group of America: $476.32 million (2.15% of AUM)
GATX Corp: $473.92 million (2.14% of AUM)
Houlihan Lokey: $444.92 million (2.01% of AUM)
Moog: $393.05 million (1.77% of AUM)
Hexcel shares were priced at $61.57 as of August 18, 2025, with a one-year negative alpha of 17.0 percentage points versus the S&P 500.
The stock's dividend yield was 1.07% as of August 18, 2025; Forward P/E (FY1 2026) was 25.11; EV/EBITDA was 28.82; and shares were priced at 13.3% below the 52-week high as of August 18, 2025.
Company Overview
Revenue (TTM)
$1.88 billion
Net Income (TTM)
$88 million
Dividend Yield
1.07%
Company Snapshot
Manufactures advanced structural materials, including carbon fibers, prepregs, adhesives, and engineered aircraft components for aerospace, defense, and industrial applications.
Generates revenue through direct sales and distribution of composite materials and engineered products worldwide.
Primary customers include commercial aerospace manufacturers, defense contractors, and industrial firms requiring high-performance materials.
Hexcel supplies advanced composites and engineered products, serving the aerospace, defense, and industrial sectors. The company operates globally, providing high-performance materials for aerospace and industrial applications. Hexcel has a diversified product portfolio and a broad customer base.
Foolish take
EARNEST Partners' acquisition of stock in the advanced composite materials company, Hexcel, looks like a smart move. The company has struggled over the last few years as its two key customers, Airbus, and to a lesser extent, Boeing (and both their subcontractors), have fallen behind their aircraft production plans. That's problematic for Hexcel because, unlike many other aerospace suppliers, it can't fall back on aftermarket demand when original equipment manufacturing (the aircraft) demand is weak.
It's even more problematic considering that Hexcel geared up for more volume demand than it received, to the detriment of its margins. That said, the backlog at Airbus and Boeing isn't disappearing. In fact, according to their last earnings reports, Airbus has a backlog of 8,754 commercial airplanes, and Boeing's commercial airplane backlog is over 5,900.
Provided there isn't a recession in the travel industry, those orders are likely to get filled– good news for Hexcel. Still, it's not the whole story, because the company benefits not only from increased aircraft volume but also from an ongoing trend towards newer planes having an ever-increasing amount of advanced composites in airplanes.
Investors like EARNEST will need to be patient, not least because clearing the supply chain crisis in the aerospace industry is taking longer than many expected. Still, it's only a matter of time, and buying on a dip in Hexcel's share price makes sense.
Glossary
13F: A quarterly SEC filing by institutional investment managers disclosing their equity holdings.
AUM (Assets Under Management): The total market value of assets an investment firm manages on behalf of clients.
Alpha: A measure of an investment's performance relative to a benchmark, often indicating outperformance or underperformance.
Dividend yield: Annual dividends per share divided by the share price, expressed as a percentage.
Forward P/E: Price-to-earnings ratio using forecasted earnings for the next fiscal year.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; a valuation metric.
Prepreg:Reinforced fibers pre-impregnated with resin, used in advanced composite manufacturing.
Composite materials: Engineered materials made from two or more constituent substances with different physical or chemical properties.
TTM: The 12-month period ending with the most recent quarterly report.
Quarterly average price: The average share price of a security over a specific quarter.
Market value: The total dollar value of a company's outstanding shares, calculated using the current share price.
Engineered products: Items designed and manufactured to meet specific technical requirements, often for industrial or aerospace use.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Houlihan Lokey. The Motley Fool recommends Hexcel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

EARNEST Partners Buys the Dip in Hexcel Stock

The S&P 500 Index ($SPX) (SPY) today is down by -0.40%, the Dow Jones Industrials Index ($DOWI) (DIA) is down by -0.64%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down by -0.39%. September E-mini S&P futures (ESU25) are down -0.43%, and September E-mini Nasdaq futures (NQU25) are down -0.48%.
Stock indexes are moving lower today, with the Dow Jones Industrials falling to a 1-week low. Concerns about consumer spending are weighing on stocks after Walmart reported weaker-than-expected Q2 EPS. Also, higher bond yields are undercutting stocks, with the 10-year T-note yield up +3 bp to 4.32% after Kansas City Fed President Jeffrey Schmid said inflation risks are marginally higher than risks to the labor market and "modestly restrictive" monetary policy is still appropriate. Signs of strength in US manufacturing activity may also keep the Fed from cutting interest rates after the Aug S&P manufacturing PMI unexpectedly expanded at the fastest pace in three years.
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Today's weekly US jobless claims report showed a weaker labor market. US weekly initial unemployment claims rose by +11,000 to a 2-month high of 235,000, showing a weaker labor market than expectations of an increase to 225,000. Weekly continuing claims rose +30,000 to a 3.75-year high of 1.972 million, higher than expectations of 1.960 million, showing people out of work are finding it harder to land a new job.
The US Aug Philadelphia Fed business outlook survey fell -16.2 to -0.3, weaker than expectations of 6.5.
The US Aug S&P manufacturing PMI unexpectedly rose +4.5 to a 3-year high of 53.3, better than expectations of a decline to 49.7.
On the geopolitical front, US Vice President Vance said negotiations over ending Russia's war in Ukraine are focused on security guarantees for Ukraine and territory Russia wants to control, including Ukrainian territory that it currently isn't occupying, as the US tries to broker a peace deal between the two countries. The US is working to set up a meeting between President Putin and Zelensky, and if that meeting goes well, President Trump said he'll look to follow up with a trilateral summit with the leaders. The outcome of the negotiations could have macroeconomic implications regarding tariffs and oil prices, and could, of course, have significant consequences for European security.
The focus of the markets this week will be on any new tariff news and signs of progress toward a Ukraine peace deal. Later today, July existing home sales are expected to fall -0.3% m/m to 3.92 million. On Friday, Fed Chair Powell speaks on the economic outlook at the Federal Reserve's annual symposium at Jackson Hole, Wyoming.
Regarding tariffs, President Trump widened steel and aluminum tariffs to include more than 400 consumer items that contain the metals, such as motorcycles, auto parts, furniture components, and tableware. The change went into effect on Monday and did not exclude goods already in transit. Last Friday, Mr. Trump said, "I'll be setting tariffs next week and the week after on steel and on, I would say chips – chips and semiconductors, we'll be setting sometime next week, week after." Mr. Trump last week said he planned a 100% tariff on semiconductors but would exempt companies that move chip manufacturing to the US. Mr. Trump also mentioned 200% or 300% tariffs on chips.
In other recent tariff news, Mr. Trump last Tuesday extended the tariff truce with China for another 90 days until November. On August 6, Mr. Trump announced that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India's purchases of Russian oil. On August 5, Mr. Trump said that US tariffs on pharmaceutical imports would be announced "within the next week or so." According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 79% at the September 16-17 FOMC meeting, down from 93% last Thursday. The markets are discounting the chances at 51% for a second -25 bp rate cut at the following meeting on October 28-29.
Earnings reports indicate that S&P 500 earnings for Q2 are on track to rise +9.1% y/y, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence. With over 93% of S&P 500 firms having reported Q2 earnings, about 83% of companies exceeded profit estimates.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.45%. China's Shanghai Composite rallied to a new 10-year high and closed up +0.13%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -0.65%.
Interest Rates
September 10-year T-notes (ZNU5) today are down -5 ticks, and the 10-year T-note yield is up +3.3 bp to 4.324%. Sep T-notes are under pressure today on hawkish comments from Kansas City Fed President Jeffrey Schmid, who said "modestly restrictive" monetary policy is still appropriate due to inflation risks. T-notes added to their losses today after the Aug S&P manufacturing PMI expanded by the most in three years.
Losses in T-notes are limited on Fed-friendly US economic news that showed weekly jobless claims rose more than expected to a 2-month high, and the Aug Philadelphia Fed business outlook survey fell more than expected.
Fed Governor Lisa Cook said she intends to remain at the Fed despite calls from President Trump for her to resign over allegations that she committed mortgage fraud. If Cook is fired or resigns, Mr. Trump could appoint another Fed Governor who favors his lower interest rate policies.
European government bond yields today are moving higher. The 10-year German bund yield is up +2.5 bp to 2.742%. The 10-year UK gilt yield is up +3.0 bp to 4.702%.
The Eurozone Aug S&P manufacturing PMI unexpectedly rose +0.7 to 50.5, stronger than expectations of a decline to 49.5 and the fastest pace of expansion in 3 years. The Aug composite PMI unexpectedly rose +0.2 to a 15-month high of 51.1, stronger than expectations of a decline to 50.6.
Swaps are discounting the chances at 2% for a -25 bp rate cut by the ECB at the September 11 policy meeting.
US Stock Movers
Weakness in chip stocks is a drag on the overall market. Intel (INTC) and NXP Semiconductors NV (NXPI) are down more than -2%. Also, ON Semiconductor (ON), ASML Holding NV (ASML), Microchip Technology (MCHP), Advanced Micro Devices (AMD), Qualcomm (QCOM), and GlobalFoundries (GFS) are down more than -1%.
Walmart (WMT) is down more than -4% to lead losers in the S&P 500 and Dow Jones Industrials after reporting Q2 adjusted ESP of 68 cents, weaker than the consensus of 74 cents.
Maplebear Inc (CART) is down more than -3% after Wedbush downgraded the stock to underperform from neutral with a price target of $42.
SharkNinja Inc. (SN) is down more than -3% after Chairman Wang sold 5 million shares in an overnight registered block trade between $116 and $118 per share.
Gilead Sciences (GILD) is down more than -2% to lead losers in the Nasdaq 100 after Reuters reported that CVS Health declined to add the company's HIV prevention shot to its drug coverage lists.
Kilroy Realty (KRC) is down more than -1% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $33.
Nordson (NDSN) is up more than +7% to lead gainers in the S&P 500 after reporting Q3 sales of $741.5 million, stronger than the consensus of $722.3 million.
PDD Holdings (PDD) is up more than +2% to lead gainers in the Nasdaq 100 on bullish optimism for Chinese stocks after the Shanghai Composite rallied to a 10-year high today.
Hewlett-Packard Enterprise (HPE) is up more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $28.
DaVita (DVA) is up more than +1% after its board boosted the existing stock buyback authorization by $2 billion.
Dayforce (DAY) is up more than +1% after Thoma Bravo agreed to buy the company for $12.3 billion, or about $70 a share.
Boeing (BA) is up +0.41% after Bloomberg reported the company is close to finalizing a deal to sell China as many as 500 aircraft.
Earnings Reports(8/21/2025)
Intuit Inc (INTU), Louisiana-Pacific Corp (LPX), Ross Stores Inc (ROST), Walmart Inc (WMT), Workday Inc (WDAY), Zoom Communications Inc (ZM).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Pressured by Weak Walmart Earnings and Higher Bond Yields

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Industrial Select Sector SPDR Fund (Symbol: XLI) where we have detected an approximate $340.2 million dollar inflow -- that's a 1.5% increase week over week in outstanding units (from 151,576,000 to 153,826,000). Among the largest underlying components of XLI, in trading today General Electric Co (Symbol: GE) is up about 1.9%, Caterpillar Inc. (Symbol: CAT) is down about 0.7%, and Boeing Co. (Symbol: BA) is higher by about 0.2%. For a complete list of holdings, visit the XLI Holdings page » The chart below shows the one year price performance of XLI, versus its 200 day moving average:
Looking at the chart above, XLI's low point in its 52 week range is $112.75 per share, with $155.15 as the 52 week high point — that compares with a last trade of $151.23. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Funds Holding RSSL
Funds Holding SGK
BUSE Price Target
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

XLI, GE, CAT, BA: Large Inflows Detected at ETF

On Aug. 13, U.S. President Donald Trump signed a new executive order, aimed at dramatically accelerating the U.S. commercial space industry by reducing environmental review timelines, streamlining launch and spaceport permits, and expediting approvals for novel missions to enhance national and economic security. This regulatory push should act as a major growth catalyst for defense titan, Lockheed Martin Corp. (LMT), which has been at the forefront of the space industry for more than half a century now.
Notably, Lockheed is a prime contractor for NASA's deep-space Orion spacecraft and builds key satellites for national security. LMT’s most direct benefit comes through its joint venture with Boeing, United Launch Alliance (“ULA”), which is a major player in launching crucial government payloads.
In particular, the order's mandate to expedite environmental reviews at launch sites and the push to reform safety rules for vehicles with advanced flight termination systems can be projected to expedite ULA's Vulcan Centaur rocket launch with less delay and cost.
As this executive order slashes regulatory delays and costs, Lockheed's strategy to commercialize Orion through reusability and flexible missions should prove beneficial. By streamlining launch cadence and approvals, the order directly supports Lockheed's push to improve cost-effectiveness and meet NASA's evolving space exploration needs more competitively.
Other Stocks to Benefit
LMT apart, stocks like Boeing (BA) and L3Harris Technologies (LHX) that are deeply involved in space missions should also benefit from the aforementioned executive order, which pushes to substantially increase commercial space launch cadence.
Notably, Boeing is part of NASA’s Space Launch System (“SLS”), the only proven deep-space optimized, super-heavy lift rocket built to carry astronauts and cargo farther and faster than any rocket in history. BA is the prime contractor for the SLS program’s core stage, upper stage and avionics systems.
On the other hand, L3Harris is involved in the Artemis II mission through its Aerojet Rocketdyne business unit, which provides the RS-25 engines that power the SLS core stage. The company supported more than 2,100 space launches that provided critical intelligence to the United States.
The Zacks Rundown for LMT
Shares of LMT have lost 9% in the year-to-date period against the industry’s 26.9% growth.
Image Source: Zacks Investment Research
The company’s shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.26X compared with its industry’s average of 27.54X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for LMT’s near-term earnings has moved south in the past 60 days.
Image Source: Zacks Investment Research
LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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7 Best Stocks for the Next 30 Days
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Trump's New Executive Order Fast-Track Lockheed's Space Ambitions?

Making Sense of Market Hyperbole

Key Points
For the first two decades of the 21st century, defense stocks sold for an average of 1.4x sales.
Today, these same defense stocks cost twice as much.
The defense sector is booming, yes. But the risk is also rising.
For more than a year now, I've been warning investors that defense stocks cost too much. At first, that warning seemed prescient, when shares of almost all of America's leading publicly traded defense companies declined within months of my sounding the alarm. Fast forward nearly a year, and things have gotten both better... and worse.
The better: Defense stock prices bounced back (which should make current shareholders happy).
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The worse: As of today, almost all defense stocks look more overpriced than ever before. For anyone looking to buy new shares of defense stocks, this is bad news.
What history says about defense stocks
How do I come to these conclusions? By looking at the data.
Over the 10-year period running from 2004 to 2013, over the 10 years running from 2014 to 2023, and over the 20-year period running from 2004 to 2023, I've calculated the average enterprise value-to-sales ratios (EV/S) for each of 10 major U.S. defense companies, using data from S&P Global Market Intelligence.
(As a reminder, EV/S ratios are similar to price-to-sales ratios, except that EV/S adjusts market capitalizations to factor in net cash on the balance sheet -- or, more commonly, net debt).
As you'll see below, these data show that defense companies early in the 21st century cost about 1x their annual sales, but that prices have been climbing steadily for the past decade. Averaging out the numbers, for the past 20 years defense stocks have cost about 40% more than their annual sales -- and this is the number I'm tentatively assuming to be the new "fair value" for defense stocks.
Average enterprise value-to-sales ratio (EV/S) from:
2004-2013
2014-2023
2003-2023
Average
1.06
1.89
1.40
Data source: S&P Global Market Intelligence. * Huntington Ingalls data begins in 2011, the year when Northrop Grumman spun off Huntington Ingalls as a separate company. ** Leidos data begins in 2006, the year of its IPO. Data on its average enterprise value-to-sales ratio for 2014 is missing because the company changed its fiscal year in 2015, skewing the data somewhat.
Now we compare these 20-year-average numbers to what the stocks cost today. (To make it easier for readers to quality-check my numbers, I provide both EV/S, and more commonly available P/S ratios).
EV/S today
Price-to-sales ratio today
Boeing
2.74
2.21
General Dynamics
1.86
1.71
Huntington Ingalls
1.13
0.91
Kratos Defense & Security Solutions
9.20
8.87
Leidos Holdings
1.62
1.38
L3Harris Technologies
2.91
2.40
Lockheed Martin
1.69
1.42
Northrop Grumman
2.43
2.08
RTX Corp
2.95
2.51
Textron
1.16
1.03
Average
2.77
2.45
What this means for defense stock investors
So what has changed since the last time we checked in on the defense stocks, three months ago?
Basically, every single one of these stocks, with the sole exception of Lockheed Martin, has gotten more expensive. Lockheed, if you recall, suffered a steep sell-off after reporting "a significant profit miss" last month caused by a near-$1 billion charge on "a classified aerospace project," and it still hasn't fully recovered from that misstep. But all the others have.
Again, this probably sounds like good news for investors who own defense stocks. But these stretched valuations bring with them a significant risk of future steep declines, for both existing and new buyers. The average EV/S ratio of this group, 2.77, means that defense stocks as a whole currently cost nearly twice what has historically been their fair value.
Will this decline happen tomorrow? Probably not. In fact, with military tensions continuing to rise in the South China Sea and elsewhere, active conflict persisting in the Middle East, and Europe still embroiled in its biggest land conflict since World War II, investors may keep betting on military stocks for quite some time.
But with valuations as extreme as what we see today, I simply don't see much reason to expect defense stocks to move higher. On the contrary, if I were to bet on it, my hunch is that over the next decade, defense stocks will underperform the S&P 500 by a significant margin.
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When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,070%* — a market-crushing outperformance compared to 184% for the S&P 500.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends L3Harris Technologies. The Motley Fool recommends Lockheed Martin, RTX, and Textron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Defense Stocks Just Got Even More Expensive

Lockheed Martin Corporation (LMT) recently secured a modification contract valued at $720.1 million to produce Joint Air-to-Ground Missiles (JAGM) and Hellfire missiles. The work related to this deal will be carried out in Ocala, FL, and is projected to be completed by Sept. 30, 2028.
The award has been provided by the U.S. Army Contracting Command, Redstone Arsenal, AL.
What’s Favoring LMT Stock?
With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes growing investments in missiles and missile systems, which are crucial for warfare missions. Lockheed, as a prominent manufacturer of missiles and missile defense systems, has thus been witnessing a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is an example of that.
Notably, LMT Hellfire is a multipurpose missile capable of defeating a broad target set. On the other hand, JAGM is a next-generation missile that combines the capabilities of LMT’s Hellfire and LONGBOW missiles into one system, providing multi-domain combat solutions.
The aforementioned missiles’ viability in the defense industry ushers in solid order flow for Lockheed, like the latest one, further reflecting the solid demand that they boast in the missile market.
LMT Stock’s Growth Prospects
Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems, backed by the rapid development of advanced missile technologies over the last decade.
This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the missiles and missile defense systems market during the 2025-2030 time period.
This should benefit Lockheed, with its Missile and Fire Control unit being a recognized developer of high-performance missiles. The unit pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense air and missile defense programs as well. Its prominent missiles include the Precision Strike Missile and the Long Range AntiShip Missile.
Prospects of LMT’s Peers
Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below.
Northrop Grumman Corporation (NOC): Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.
RTX Corporation (RTX): It is known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.
The Boeing Company (BA): It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.