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The Zacks Analyst Blog Highlights: Boeing, Lockheed, Raytheon, General Dynamics And Huntington

Published 06/17/2019, 10:59 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – June 18, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Boeing (NYSE:BA) , Lockheed Martin (NYSE:LMT) , Raytheon (NYSE:RTN) , General Dynamics (NYSE:GD) andHuntington Ingalls (NYSE:HII) .

Here are highlights from Monday’s Analyst Blog:

Defense Stocks to Gain If Trump Sends Troops to Middle East

U.S. defense players are once again in focus following last week’s attack on two oil tankers in the Gulf of Oman, which added more fuel to the year-long U.S.-Iran tensions. President Trump accused Iran's government on the basis of a video that allegedly showed an Iranian patrol boat removing an unexploded mine from one of the vessels' hulls.

This once again sparked a wave of animosity between the two nations, which are already on the brink of a war with America imposing several sanctions against Iran, especially on oil export. Notably, these sanctions were part of Trump’s initiative to put an embargo on Iran’s missile and nuclear programs and diminish its influence in the Middle East.

Why Send Troops Now?

Tension between the two countries has been rising of late, especially after Trump administration announced termination of all sanction related exemptions granted to some of the Islamic Republic’s biggest oil customers, effective May 2. This drastic step was taken as Iran failed to meet the 12 demands that America laid out earlier for lifting of the sanctions. This resulted in a decline in oil supply, thereby pushing up oil prices in the global market.

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In retaliation, Iranian officials threatened to shut down the Strait of Hormuz, situated between Persian Gulf and the Gulf of Oman, which serves as one of the world’s most important passageways for oil transport. While this threat was not put into action by Iran ultimately, the recent attacks on the oil tankers have rattled the international petroleum market and raised the specter of armed conflict in the Middle East.

Now, Trump's national security team is planning to discuss in detail this week whether to send additional U.S. military force to the Middle East in the wake of this assault.

Will This Boost Defense Stocks?

Per a report by CNN, US Central Command sent initial forces to the region in May 2019. According to some defense officials, if any critical situation arises, the U.S. administration will consider sending additional capabilities such as Patriot missile batteries, fighter jets and ships to counter missile firings by Iran. For now, ground combat forces are not part of the discussions.

If the U.S.-Iran conflict intensifies and Trump does send additional military force to the Middle East, it would prove to be beneficial for U.S. defense stocks. In particular, shares of Boeing and Lockheed Martin — fighter jet makers, Raytheon — Patriot missile manufacturer, General Dynamics and Huntington Ingalls — military shipbuilders are expected to benefit if a war breaks out between the United States and Iran.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report

General Dynamics Corporation (GD): Free Stock Analysis Report

The Boeing Company (BA): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Raytheon Company (RTN): Free Stock Analysis Report

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