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Three aerospace stocks to buy as wars rage present enticing investment opportunities for those interested in companies that should maintain demand for their products despite the economic instability caused by President Trump’s tendency to threaten or apply tariffs to trading partners.
Catalysts ahead for next year or so for aerospace and defense stocks include: 1) the passage of the FY25 budget, 2) the introduction and passage of the FY26 budget, and 3) award announcements from both the US and its European allies, wrote Jason Gursky, an aerospace and defense analyst with Citi Research. In a recent research note, Gursky opined that all three catalysts are likely to support a mid-single digit growth outlook for the industrial base, which compares favorably to the -1% to +1% currently being priced into the stocks.
“We recognize this view will require patience, with headlines often losing sight of the long-term fundamentals of the industry,” Gursky continued. “And the inability of Congress to pass spending bills in a methodical manner can create volatility. But so long as the threat environment remains elevated, and the United States plans to continue its leadership role in the world – either as the lone superpower or as a power in a multi-polar world – we expect defense spending to remain robust and for defense company stocks to perform well from current levels.”
Three Aerospace Stocks to Buy as Wars Rage: HWM
Howmet Aerospace (NYSE: HWM) is an advanced engineering company in Pittsburgh. Howmet is not as well known as the giant aerospace and defense companies but it provides some critical components in the F-35 joint strike fighter that hits Mach 1.6 under the thrust of possibly the most advanced engine on earth.
The joint strike fighter is built with cutting-edge materials, integrated airframe design and next-generation avionics to enable this fifth-generation fighter jet to operate with potentially unprecedented stealth, speed and agility in air-to-air and air-to-ground combat, company officials said.
In developing this complex fighter jet, Lockheed Martin (NYSE: LMT) turned to Howmet to provide key parts that include single-piece, forged aluminum bulkheads that form the backbone of the aircraft structure and save 300 to 400 pounds per jet, while cutting costs by 20%. The fighter jet also has titanium bulkheads and uses titanium to manufacture other airframe structures for all three F-35 JSF variants. Howmet further supplies single-crystal, nickel-based superalloy blades and vanes that operate in environments hotter than the melting point of the metal to propel the engine.
One seasoned stock picker who likes Howmet Aerospace as a buy recommendation is Jim Woods, who heads the Investing Edge newsletter that has the stock in its Top 10 Growth Accelerators portfolio. Howmet Aerospace is the top-performing pick in the Top 10 Growth Accelerators in that portfolio of Investing Edge.
As a former Army paratrooper, Woods has a keen interest in defense issues and follows them closely for his Investing Edge and advisory service subscribers.
Jim Woods heads the Investing Edge newsletter and Bullseye Stock Trader.
Howmet Aerospace is up 18.89% year to date through the close of trading on Tuesday, March 18.
Woods also recommended Howmet as a stock in his Bullseye Stock Trader advisory service during February 2025. Despite the market’s slippage in recent weeks, Howmet is up 2.4% and the related calls options he advised his Bullseye Stock Trader subscribers to buy are up by double-digit percentages.
Chart courtesy of www.stockcharts.com
Three Aerospace Stocks to Buy as Wars Rage: LHX
L3Harris Technologies Inc. (NYSE: LHX), is an aerospace and defense stock that has an average price target of $258 per share, or 23% upside over the next 12-18 months, said Michelle Connell, president and owner of Dallas-based Portia Capital Management, LLC. She told me LHX has good upside.
Michelle Connell heads Portia Capital Management.
LHX is a strong and dependable dividend stock, Connell told me. Its current dividend yield is 2.27%. For the past 23 years, LHX has increased its dividend every year.
When LHX reports earnings in April, the company is expected to increase the dividend once again. LHX’s cost reduction program has delivered results far beyond original estimates, Connell continued.
In 2024, the company delivered $800 million in cost savings. In 2025, it is expected to produce an additional $400 million in savings. This is $200 million more than originally estimated, Connell counseled. Another plus is the company’s backlog is around 1.6 times last year’s, 2024’s revenues.
Chart courtesy of www.stockcharts.com
Three Aerospace Stocks to Buy as Wars Rage: AVAV
AeroVironment, Inc. (NASDAQ: AVAV), of Arlington, Virginia, is rated as “outperform by Chicago-based investment firm William Blair & Co. A designer and manufactures of unmanned aerial vehicles, AeroVironment is expected to close its $3 billion all-stock acquisition of BlueHalo in the second quarter.
On March 18, William Blair’s aerospace and defense analyst Louie DiPalma wrote that BlueHalo announced on March 17 that it completed three successful flight tests of its Freedom Eagle (FE) missile, which uses kinetic effects to intercept aerial drones. The U.S. Army is evaluating the Freedom Eagle missile and Raytheon’s Coyote drone for its next-generation counter unmanned aerial system (NGCUAS) program, DiPalma added.
“We estimate that the U.S. Army awarded Raytheon greater than $250 million for Coyote systems in 2024, which serves as a good benchmark for the annual potential size of NGCUAS,” DiPalma wrote. “BlueHalo has a robust product portfolio beyond the Freedom Eagle missile. Other key products include the LOCUST laser weapon system, the BADGER multi-band satcom phased-array antenna, the TITAN counter-drone detection system, the BlueFin software-defined radio, and the Windjammer electronic warfare system.”
As far as potential Department of Defense (DoD) cuts, AeroVironment announced that the DoD lifted its stop-work order on foreign military sales. The DoD also recently announced that it resumed military aid to Ukraine, DiPalma wrote.
“In our view, this bodes well for AeroVironment’s fiscal fourth quarter and fiscal 2026 outlook,” DiPalma continued. “In addition, AeroVironment announced that the Defense Innovations Unit selected an AeroVironment system for Project Artemis.”
DiPalma said he remains positive on shares, as drones are a listed priority of President Trump’s administration and billionaire entrepreneur Elon Musk, who is spearheading the new Department of Government Efficiency (DOGE). The administration is expected to favor AeroVironment due to its leading position in military drones, DiPalma wrote.
Chart courtesy of www.stockcharts.com
Three Aerospace Stocks to Buy as Wars Rage: Summary
The three aerospace stocks to buy as wars rage offer the potential to outperform the market. The recent market pullback driven significantly by President Trump’s tariffs could give bargain-hunting investors a chance to buy shares of these three stocks at temporarily discounted prices.
Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.
