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Morgan Stanley updated its ratings for major defense contractors on December 16, 2025, upgrading L3Harris and General Dynamics while downgrading Lockheed Martin, based on a new valuation framework reflecting a 15% discount to the market.
Lockheed Martin's stock fell 1.52% after Morgan Stanley downgraded the company, citing a weaker growth outlook compared to its competitors.
Joby Aviation has concluded its 2025 international flight demonstrations in Japan, a key operational step supporting its target for commercial service. This milestone reinforces its leadership in the eVTOL sector and keeps it on track for an anticipated 2026 service launch.
Boeing has finalized its acquisition of key supplier Spirit AeroSystems in a strategic move to address production bottlenecks and quality control issues. The decision comes amid mixed November delivery data and persistent regulatory scrutiny, but the company maintains a strong order backlog and positive cash flow forecast.
BAE Systems secured an $11 million contract to supply Identification Friend or Foe (IFF) systems for South Korea's KF-21 jets. This deal underscores a critical defense sector trend: the urgent need for modernized, reliable airspace deconfliction technology to mitigate operational risks.
Germany is set to acquire 750 air defense missiles from RTX for $3.5 billion, reinforcing the global rearmament trend and strengthening RTX's order backlog. The deal adds to a series of recent contract wins and positive analyst ratings for the defense contractor.
A recent Discounted Cash Flow (DCF) analysis of L3Harris Technologies (LHX) estimates its intrinsic value at US$381 per share, suggesting the stock is currently undervalued by approximately 25% against its recent trading price of US$287.
The U.S. seizure of a Venezuelan oil tanker amid a significant military deployment in the Caribbean has bolstered defense sector stocks and caused a minor uptick in oil prices. The action is part of a stated pressure campaign against the Maduro government.
Rocket Lab has advanced its Neutron rocket program by completing qualification testing for its Hungry Hippo fairing system. The component has been shipped to Virginia, marking a critical step towards the rocket's inaugural launch and entry into the medium-lift launch market.
Kratos Defense & Security Solutions is positioning itself to capture a larger share of the hypersonic weapons market by offering lower-cost systems for testing and potential operational use, responding to a clear Pentagon need for more affordable high-speed weapons.
BAE Systems has secured a $1.7 billion contract from the U.S. Navy for its Advanced Precision Kill Weapon System (APKWS), signaling a significant ramp-up in precision munitions production to meet escalating global demand and reinforcing a bullish outlook for the defense sector.
L3Harris Technologies secured its largest single-year contract from Lockheed Martin, valued at up to $200 million, to produce propulsion units for the GMLRS. The award accelerates a significant, government-backed expansion of L3Harris's rocket motor production capacity.