Investors are looking for safe havens amidst the economic turmoil caused by the coronavirus pandemic. While plenty of money has moved into gold and Bitcoin, there is also a chance defense stocks will benefit from the economic downturn. If President Trump begins to bang the war drums or even hint at military action against Iran, China or North Korea, defense stocks are sure to rise. Furthermore, President Trump’s creation of the much-hyped Space Force has the potential to give defense stocks an ongoing boost in the months and possilby even years or decades ahead. Consider establishing a position in the following defense stocks and your portfolio’s performance just might outpace the market as a whole.

Lockheed Martin Corporation (LMT)

The world will need technology and defense systems regardless of the economy’s peaks and troughs. If you are like most investors, you are risk averse amidst the current market undulations, making the likes of LMT that much more appealing. LMT has a POWR Rating of B with an A Peer Grade, making it one of the more attractive defense industry stocks.

LMT moved down to $276 in mid-March. Today, LMT trades at $378. LMT recently secured a $6.1 billion Patriot Missile deal with the United States Army. TipRanks’ average analyst price target for the stock is $417.92, with 8 analysts rating the stock a buy, 4 rating it a hold and none advising investors to sell.

Northrop Grumman (NOC)

No matter how bad the economy gets, the United States governments and governments across the globe will need aircraft, electronics for defense systems and shipbuilding capabilities. NOC provides just that. NOC even provides information technology services for defense systems to boot. Though NOC ’20 first quarter earnings were 5% less than Zacks’ estimate, the company’s bottom line increased on a year-over-year basis.

Furthermore, Bernstein has upgraded NOC from market perform to outperform, insisting the company has the potential to benefit from the current economic recession. It is also important to note NOC will play an important role in President Trump’s recently developed Space Force, giving the stock that much more momentum, at least up until the election. NOC is likely to inch up toward TipRanks’ average analyst price target of $389 as the economy begins a slow recovery and that many more investors step off the sidelines to get back into the game.

L3Harris Technologies (LHX)

Security automation. Wireless equipment. Space and airborne systems. These words describe the future of military defense as well as the human race. LHX makes and sells each of the forementioned defense technologies and services. This defense superstar recently beat earnings, putting up a 20.7% bottom line improvement in the first quarter of ’20 compared to that in ’19.

LHX traded at $150 on March 22. At the current moment, LHX goes for $182. TipRanks’ average analyst price target for the stock is $242.29, with 7 analysts rating the stock a Buy and zero recommending investors hold or sell.

LHX aviation, communication and space/airborne systems will all be relied upon for our nation’s recently created Space Force. Furthermore, LHX has a B POWR Rating Peer Grade so the stock stands tall amongst its defense industry competitors. Look for LHX to trend toward $200 in the months ahead.

Raytheon Technologies Corp. (RTX)

Some investors are hesitant to invest in defense stocks simply because the majority of the big dogs in this sector have a significant barrier to entry in the form of an elevated price tag. RTX breaks the mold as a sub-$100 defense stock.

RTX has suffered quite the fall due to its exposure in the commercial aviation space that has been absolutely hammered with the onset of the coronavirus. However, savvy investors will view the sell-off as a potential buying opportunity.

RTX recently beat first-quarter earnings estimates yet the stock is trading at $57.91, nearly half the price it traded at in early February. Ride RTX’s recent spring momentum and the stock just might move closer toward TipRanks’ average analyst price target of $82.75 prior to the release of its second-quarter results.

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LMT shares closed at $378.40 on Friday, up $1.86 (+0.49%). Year-to-date, LMT has declined -2.21%, versus a -8.61% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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