U.S. equities are trading with modest gains on Friday afternoon, recovering smartly from the overnight decline in the futures market after President Trump authorized a surprise cruise missile attack against a Syrian airbase. The move was done in retaliation for an alleged chemical weapons attack; damaging aircraft and infrastructure, as well as reportedly resulting in several causalities.
Wall Street was initially spooked by the move since it risks an escalation of the standoff between besieged Syrian leader Assad and his Russian and Iranian allies, Isis forces, and U.S.-backed rebels. Moreover, Russian personnel and equipment were on the airbase as well.
While stocks are taking this all in stride for now — likely on hopes the incident will remain an isolated strike — key defense contractor stocks are on the move. The group has been surging since Election Day on Trump’s campaign promises to boost military spending. Now, the specter of expanded U.S. involvement in the Syrian conflict is only further encouraging the bulls.
Here are three to watch:
War Stocks to Buy: Boeing (BA)
Boeing Co (NYSE:BA) shares are making a move at the $180 level, threatening to break up and out of a two-month consolidation range after a 5% selloff from the early March high found support above the 50-day moving average.
The company was recently initiated with a “buy” rating from analysts at Berenberg with a $202 price target. Barclays raised their price target to $190, noting recent concerns about near-term valuation pressures seem to have faded.
The company will next report results on April 26 before the bell. Analysts are looking for earnings of $2 per share on revenues of $21.8 billion.
War Stocks to Buy: Lockheed Martin (LMT)
Lockheed Martin Corporation (NYSE:LMT) shares are threatening to break up and out of a three-month consolidation range, challenging its highs from last month.
The company has benefited from a number of recent contract wins with the Pentagon and is moving forward with a number of others including a possible $29 billion heavy-lift helicopter order with the Marines.
Attention continues to be on the F-35 program as Trump applies pressure to lower the per-unit costs for a jet that made up 23% of the company’s total net sales in 2016.
The company will next report results on April 25 before the bell. Analysts are looking for earnings of $2.78 per share on revenues of $11.2 billion.
War Stocks to Buy: General Dynamics (GD)
General Dynamics Corporation (NYSE:GD) shares are inching higher, lifting up and off of the 50-day moving average to challenge highs set back in March.
The stock recently enjoyed a price target upgrade from RBC Capital Markets, who are now looking for $211 on a strong 2020 outlook supported by an order backlog and new products. The company reported better-than-expected earnings of $2.62 per share — eight cents ahead of estimates — back in January on a 5.4% increase in sales.
The company will next report results on April 26 before the bell. Analysts are looking for earnings of $2.31 per share on revenues of $7.7 billion.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.
