Will Defense Stocks Regain Their Cold War Allure?

The Wall Street Journal reports that following the Israeli airstrike targeting a Hezbollah leader on September 27, shares in major defense companies like Lockheed Martin, RTX, and Northrop Grumman have outperformed the S&P 500. However, analysts caution that despite this performance boost, the defense sector is unlikely to see valuations comparable to those during the Cold War era without significantly larger defense budgets. The current fiscal environment and spending constraints may limit the industry’s long-term growth potential, despite increased geopolitical tensions.

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