Why European Defense stocks should continue to maintain premium valuations By Investing.com
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 16 2025
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Source: Investing.com
European Defense Spending Increase: European defense stocks are expected to maintain high valuations due to a significant increase in military spending, projected to rise to 3%-3.5% of GDP, translating to an additional $200-$300 billion for defense companies.
Investment Opportunities and Challenges: Companies like Hensoldt, Rheinmetall, and Saab are well-positioned to benefit from this spending wave, while challenges such as long lead times for contracts and limited margin expansion remain; the upcoming EU initiatives and NATO summit will further clarify procurement strategies.
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.
