Trump Proposes U.S. Military Budget Increase to $1.5 Trillion by 2027
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Military Budget Surge: Trump proposed increasing the U.S. military budget from $900 billion to $1.5 trillion by 2027, which is expected to significantly enhance investment attractiveness in the defense sector and drive related stock prices higher.
- Defense Stock Rebound: Following Trump's budget announcement, the iShares U.S. Aerospace & Defense ETF rose 1.4% and the State Street SPDR Aerospace & Defense ETF surged 3.3%, fully reversing the previous day's losses and indicating market optimism regarding defense spending.
- Small Contractors Lead Gains: Kratos Defense & Security Solutions saw its stock jump 18%, Red Cat Holdings gained 12%, and Karman Holdings rose 10%, showcasing strong investor confidence in small defense firms during the market rebound.
- Large Firms Steady Growth: Major defense companies like Leonardo DRS, Huntington Ingalls, and L3Harris saw stock increases of 9%, 7%, and 6% respectively, indicating that expectations of increased defense spending will bolster their long-term growth potential.
Analyst Views on DRS
Wall Street analysts forecast DRS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DRS is 47.00 USD with a low forecast of 40.00 USD and a high forecast of 50.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
4 Buy
2 Hold
0 Sell
Moderate Buy
Current: 42.260
Low
40.00
Averages
47.00
High
50.00
Current: 42.260
Low
40.00
Averages
47.00
High
50.00
About DRS
Leonardo DRS, Inc. is a provider of advanced defense technology to the United States national security customers and allies around the world. It specializes in the design, development and manufacture of advanced sensing, network computing, force protection, and electric power and propulsion, and other mission-critical technologies. It is a provider of defense products and technologies that are used across land, air, sea, space, and cyber domains. Its segments include Advanced Sensing and Computing (ASC) and Integrated Mission Systems (IMS). The ASC segment designs, develops, and manufactures sensing and network computing technology that enables real-time situational awareness required for operational decision making and execution by its customers. The IMS segment designs, develops, manufactures, and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
