Trump Threatens Defense Sector with Dividend and Buyback Caps Amid $1.5 Trillion Spending Plan
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Defense Spending Proposal: Trump proposed increasing U.S. defense spending by 50% to $1.5 trillion by 2027, aiming to enhance military capabilities and drive long-term growth in the defense sector.
- Dividend and Buyback Caps: Trump called for limits on dividends and stock buybacks at major defense contractors, specifically targeting RTX for prioritizing shareholder interests over military investments, which could impact future capital allocation.
- Market Volatility: Trump's initial comments led to a roughly 5% drop in defense stocks at Wednesday's close, but optimism over increased defense spending reversed this trend, with Lockheed Martin and Northrop Grumman seeing stock price increases of 6% and similar pre-market moves.
- Uncertain Industry Outlook: While the defense spending plan may provide short-term benefits, the proposed limits on dividends and buybacks could affect the attractiveness of defense contractors, prompting investors to monitor policy changes and their long-term implications for the industry.
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Analyst Views on ABBV
Wall Street analysts forecast ABBV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ABBV is 253.26 USD with a low forecast of 218.00 USD and a high forecast of 289.00 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.
22 Analyst Rating
15 Buy
7 Hold
0 Sell
Moderate Buy
Current: 218.670
Low
218.00
Averages
253.26
High
289.00
Current: 218.670
Low
218.00
Averages
253.26
High
289.00
About ABBV
AbbVie Inc. is a global, diversified research-based biopharmaceutical company. It is engaged in research and development, manufacturing, commercialization and sale of medicines and therapies. Its product portfolio includes Immunology, Oncology, Aesthetics, Neuroscience, Eye Care and Other Key Products. Immunology products include rheumatology, dermatology and gastroenterology. Oncology products include Imbruvica, Venclexta/Venclyxto, Elahere and Epkinly. Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring, and skincare products. Its Neuroscience products include Botox Therapeutic, Vraylar, Duopa and Duodopa, Ubrelvy, and Qulipta. Eye Care products include Ozurdex, Lumigan/Ganfort, Alphagan/Combigan, Restasis, and other eye care. Other key products include Mavyret/Maviret, Creon, and Linzess/Constella. Its investigational candidate, bretisilocin, is for the treatment of patients with moderate-to-severe major depressive disorder (MDD).
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.
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