- Lockheed Martin (LMT +0.1%), Raytheon (RTN -0.3%) and Boeing (BA +0.3%) all have hit all-time highs in today's trade, as a new round of threats from North Korea is seen boosting defense companies, but some analysts believes the stocks may have climbed too far too fast.
- Matt Maley, equity strategist at Miller Tabak, tells CNBC he likes defense stocks for the long term but thinks they look overbought from a technical standpoint in the short term, pointing to LMT and RTN as not yet breaking above their recent sideways trajectory.
- Erin Gibbs, portfolio manager at S&P Global, says the industry's valuations are quite high relative to the S&P 500 and expects ~9% growth for this year and next year, which is 20% less than the S&P.
- The defense industry's valuation has broken above 12-year highs, Gibbs says, "so your prices are going up, but your earnings are just kind of stable. So you're paying a higher price for slower growth than you would for just the S&P 500."
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