Europe
European Defense Stocks Gain as Trump Tanks US Rivals
• President Trump’s stances on government waste, NATO, and Ukraine have negatively impacted U.S. defense stocks.
• European defense equipment manufacturers have seen better fortunes.
• Trump’s announcement of Elon Musk’s Department of Government Efficiency heading to the Pentagon and potential halving of defense budgets if negotiations with China and Russia yield a stable geopolitical backdrop have boosted European defense stocks.
• Lockheed Martin stock has been down about 22% since the Nov. 5 election.
• European investors may have received a different message, with NATO being deemed dead.
• Shares of BAE Systems, Thales, Leonardo, and Saab have seen an average increase of about 27% since the U.S. election.
• EU defense firms are trading at about 21 times the per-share earnings expected for 2025, while U.S. counterparts trade for about 16 times.
• Leonardo, the most popular defense stock in Europe, has the highest Buy-rating ratio among analysts.
