TLDR
- Defense stocks rose Monday after U.S. strikes on Iran’s nuclear facilities, with Lockheed Martin up 0.9%, Northrop Grumman up 1.3%, and RTX up 0.9%
- U.S. forces struck three Iranian nuclear sites (Fordo, Natanz, and Isfahan) on Saturday using over 125 aircraft and submarine-launched missiles
- The strikes involved equipment from most major defense contractors including Lockheed’s F-35 jets, Northrop’s B-2 bombers, and RTX’s Tomahawk missiles
- Analysts warn that short-term conflicts don’t always translate to higher defense spending or sustained stock gains
- All three major defense stocks trade at reasonable valuations with strong dividend yields and multi-year government contracts
Defense contractor stocks gained in premarket trading Monday following U.S. military strikes on Iranian nuclear facilities over the weekend. The coordinated attacks targeted three key sites and involved equipment from across the American defense industry.
Lockheed Martin shares climbed 0.9% in premarket trading, while Northrop Grumman rose 1.3%. RTX Corporation gained 0.9%, with L3Harris Technologies up 1.7% and General Dynamics adding 0.9%.
The U.S. military struck three Iranian nuclear development sites on Saturday – Fordo, Natanz, and Isfahan. Washington officials called the attacks successful, reporting severe damage to all three facilities.
The strikes involved more than 125 U.S. aircraft in a coordinated operation. Fourth and fifth-generation fighter jets from Boeing and Lockheed participated in the mission.
Northrop Grumman’s B-2 stealth bombers dropped fourteen 30,000-pound GBU-57 bunker-busting bombs during the operation. The company’s advanced stealth technology allowed the bombers to penetrate Iranian air defenses.
A U.S. submarine launched more than two dozen Tomahawk cruise missiles manufactured by RTX. The submarine-launched missiles provided additional strike capability from naval platforms.
Equipment Across Defense Industry
The Saturday strikes showcased equipment from nearly every major U.S. defense contractor. Lockheed Martin’s F-35 Lightning II fifth-generation fighter jets played a key role in the mission.
RTX’s Tomahawk missiles provided precision strike capability from multiple platforms. The company’s three divisions – Collins Aerospace, Pratt & Whitney, and Raytheon – all contribute to military operations.
Northrop Grumman’s B-2 Spirit bombers delivered the heaviest ordnance during the strikes. The company operates across four main segments: Aeronautics, Space Systems, Mission Systems, and Defense Systems.
Defense stocks have shown volatility since Israel’s attack on Iran on June 13. However, gains have remained modest, with the sector up only about 1% during this period.
Analyst Outlook
Capital Alpha Partners analyst Byron Callan noted that short-lived conflicts don’t always change military spending patterns. The analyst said it’s unclear whether the strikes will increase political support for higher defense budgets.
RTX Corporation trades at 25 times 2025 earnings estimates, slightly above the S&P 500’s forward price-to-earnings ratio of 21.5. The company offers a 1.8% dividend yield and has increased dividends for 32 consecutive years.
Northrop Grumman trades at 20 times 2025 earnings estimates, below the S&P 500 average. The company maintains a 1.8% dividend yield and has paid dividends for 35 consecutive years.
Lockheed Martin appears most attractively valued at 17 times 2025 earnings estimates. The company offers a 2.75% dividend yield, the highest among major defense contractors.
All three companies maintain strong international customer bases beyond U.S. government contracts. RTX serves customers in Poland and the UAE, while Northrop Grumman operates in 25 countries.
Lockheed Martin works with over 50 countries including Australia, Germany, and Saudi Arabia. This international diversification provides additional revenue stability beyond domestic defense spending.
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