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3 Defense Equipment Stocks to Buy Amid Solid Air Traffic Outlook
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Aerospace-Defense Equipment stocks are poised to gain from strategic mergers and acquisitions that enhance operational scale, diversify product offerings and expand market presence. However, persistent supply-chain challenges continue to constrain aircraft deliveries and parts availability, which may pressure production volumes and weigh on profitability. Despite these headwinds, strong global air passenger traffic trends signal solid growth potential for stocks in the Zacks Aerospace-Defense Equipment industry. Some key players from this industry that investors may add to their portfolio are Curtiss-Wright Corp. (CW - Free Report) , BWX Technologies (BWXT - Free Report) and Leonardo DRS, Inc. (DRS - Free Report) .
About the Industry
The Zacks Aerospace-Defense Equipment industry comprises firms that manufacture various vital components for the aerospace-defense space, ranging from aerostructures, space shuttles, propulsion systems, aircraft engines, defense electronics, missile and radar systems, to flight test equipment, structural adhesives, instrumentation and control systems, communication products and many more. Some of these companies also offer integrated simulation and training services to the U.S. defense force. While most revenues are generated from the production of the aforementioned accompaniments, industry players also generate revenues by providing notable aftermarket support and services like maintenance, repair and overhaul activities to aerospace and defense players.
3 Trends Shaping the Future of the Aerospace-Defense Equipment Industry
New Mergers and Acquisitions (M&As) Instill Hope: Historically, industrial majors have expanded their product portfolios through profitable M&As in response to growing competition. In line with this strategy, TransDigm Group completed its acquisition of the Simmonds Precision Products, Inc. Business from RTX Corporation for nearly $765 million in October 2025. This buyout should bolster TransDigm’s footprint in aerospace and defense end markets. In September 2025, AAR Corp. completed the acquisition of American Distributors Holding Company for $146 million. This acquisition expands AAR’s parts distribution business by adding new product lines and strengthening relationships with Original Equipment Manufacturers (OEMs). Such consolidations should improve economies of scale for the industry as a whole, as the participants will have access to a variety of business models. This should support both their market reach and revenue growth.
Air Traffic View Boosts Opportunities: According to the latest monthly analysis report by the International Air Transport Association (“IATA”), global air passenger traffic, measured in revenue passenger kilometers (RPK), surged a solid 4.6% year over year in August 2025. This reflected the continued growth momentum in air travel. IATA projects passenger traffic to grow 5.8% year over year in 2025. This steady growth outlook is expected to benefit aerospace and defense equipment companies, particularly those serving the commercial aviation market.
Supply-Chain Disruption Poses Risks: Ongoing supply-chain challenges continue to disrupt global trade and business operations. Airlines, in particular, are impacted by such supply-chain issues, including unexpected maintenance problems with certain aircraft and engine models, as well as delays in receiving aircraft parts and new planes, limiting their ability to expand capacity and renew fleets. According to IATA, these supply-chain constraints will hinder airlines from reaching their full growth potential and slow progress toward reducing CO2 emissions. IATA’s June 2025 outlook notes that aircraft deliveries are currently about 30% below their previous peak, pushing the global aircraft backlog to a record 17,000 units. If this backlog is primarily due to delivery delays, it suggests airlines are short by roughly 5,400 aircraft — about 18% of the active fleet. With annual production averaging around 2,000 planes, clearing this backlog could take three to five years. The reduced pace of jet deliveries and limited availability of materials for aircraft manufacturing may compel OEMs to cut production, potentially weighing on near-term earnings and cash flow across the aerospace and defense equipment industry.
Zacks Industry Rank Reflects Bright Outlook
The Zacks Aerospace-Defense Equipment industry is housed within the broader Zacks Aerospace sector. It currently carries a Zacks Industry Rank #58, which places it in the top 24% of more than 243 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few aerospace-defense equipment stocks that you may want to add to your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Beats S&P 500 & Sector
The Aerospace-Defense Equipment industry has outperformed both the Zacks S&P 500 composite and its sector in the past year. The stocks in this industry have collectively surged 37.3% in the past year, while the Aerospace sector has soared 25.7%. The Zacks S&P 500 composite has gained 18.1% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of trailing 12-month EV/Sales, which is used for valuing capital-intensive stocks like aerospace-defense equipment, the industry is currently trading at 11.49X compared with the S&P 500’s 5.73X and the sector’s 3.43X.
Over the past five years, the industry has traded as high as 11.49X, as low as 3.71X and at the median of 7.25X.
EV-Sales Ratio TTM
3 Aerospace-Defense Equipment Stocks to Buy
CurtissWright: This North Carolina-based company provides highly engineered products and services for high-performance platforms, and critical applications in key areas such as commercial aerospace and defense electronics, reactor coolant pumps for next-generation nuclear reactors, as well as advanced surface treatment technologies. In September 2025, CurtissWright announced a $200 million expansion of its 2025 share repurchase program, which is now expected to result in record annual share repurchases of more than $450 million in 2025. This share repurchase announcement highlights the company’s financial strength.
The Zacks Consensus Estimate for CW’s 2025 sales indicates a 9.7% improvement from the previous year’s reported number. The estimate for 2025 earnings implies 18.4% growth from last year’s reported figure. CW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price & Consensus: CW
Leonardo DRS: Based in Arlington, VA, this company develops advanced defense technologies for the U.S. military, intelligence agencies and allied forces, specializing in sensing, network computing, force protection, and power and propulsion systems. In September 2025, Leonardo DRS announced the launch of its new product line of high-performance AI-enabled Ground Vehicle Architecture Smart Display systems called Rugged Smart Displays – Ground. This launch should further strengthen Leonardo DRS’ position as a provider of advanced combat smart display technology.
The Zacks Consensus Estimate for DRS’ 2025 sales indicates a 10.9% increase from the previous year’s reported number. The estimate for 2025 earnings implies 19.4% growth from last year’s reported figure. It currently carries a Zacks Rank #2.
Price & Consensus: DRS
BWX Technologies: Based in Lynchburg, VA, this company provides safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration. In September, BWXT clinched a $1.6 billion deal from the Department of Energy’s National Nuclear Security Administration to support the national security mission of establishing a supply of high-purity depleted uranium. This contract should bolster the company’s backlog and revenue generation prospects.
The Zacks Consensus Estimate for BWXT’s 2025 sales calls for a 15.1% improvement from the previous year’s reported number. The estimate for 2025 earnings implies an 11.7% rise from last year’s reported figure. It currently has a Zacks Rank #2.
Price & Consensus: BWXT
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3 Defense Equipment Stocks to Buy Amid Solid Air Traffic Outlook
Aerospace-Defense Equipment stocks are poised to gain from strategic mergers and acquisitions that enhance operational scale, diversify product offerings and expand market presence. However, persistent supply-chain challenges continue to constrain aircraft deliveries and parts availability, which may pressure production volumes and weigh on profitability. Despite these headwinds, strong global air passenger traffic trends signal solid growth potential for stocks in the Zacks Aerospace-Defense Equipment industry. Some key players from this industry that investors may add to their portfolio are Curtiss-Wright Corp. (CW - Free Report) , BWX Technologies (BWXT - Free Report) and Leonardo DRS, Inc. (DRS - Free Report) .
About the Industry
The Zacks Aerospace-Defense Equipment industry comprises firms that manufacture various vital components for the aerospace-defense space, ranging from aerostructures, space shuttles, propulsion systems, aircraft engines, defense electronics, missile and radar systems, to flight test equipment, structural adhesives, instrumentation and control systems, communication products and many more. Some of these companies also offer integrated simulation and training services to the U.S. defense force. While most revenues are generated from the production of the aforementioned accompaniments, industry players also generate revenues by providing notable aftermarket support and services like maintenance, repair and overhaul activities to aerospace and defense players.
3 Trends Shaping the Future of the Aerospace-Defense Equipment Industry
New Mergers and Acquisitions (M&As) Instill Hope: Historically, industrial majors have expanded their product portfolios through profitable M&As in response to growing competition. In line with this strategy, TransDigm Group completed its acquisition of the Simmonds Precision Products, Inc. Business from RTX Corporation for nearly $765 million in October 2025. This buyout should bolster TransDigm’s footprint in aerospace and defense end markets. In September 2025, AAR Corp. completed the acquisition of American Distributors Holding Company for $146 million. This acquisition expands AAR’s parts distribution business by adding new product lines and strengthening relationships with Original Equipment Manufacturers (OEMs). Such consolidations should improve economies of scale for the industry as a whole, as the participants will have access to a variety of business models. This should support both their market reach and revenue growth.
Air Traffic View Boosts Opportunities: According to the latest monthly analysis report by the International Air Transport Association (“IATA”), global air passenger traffic, measured in revenue passenger kilometers (RPK), surged a solid 4.6% year over year in August 2025. This reflected the continued growth momentum in air travel. IATA projects passenger traffic to grow 5.8% year over year in 2025. This steady growth outlook is expected to benefit aerospace and defense equipment companies, particularly those serving the commercial aviation market.
Supply-Chain Disruption Poses Risks: Ongoing supply-chain challenges continue to disrupt global trade and business operations. Airlines, in particular, are impacted by such supply-chain issues, including unexpected maintenance problems with certain aircraft and engine models, as well as delays in receiving aircraft parts and new planes, limiting their ability to expand capacity and renew fleets. According to IATA, these supply-chain constraints will hinder airlines from reaching their full growth potential and slow progress toward reducing CO2 emissions. IATA’s June 2025 outlook notes that aircraft deliveries are currently about 30% below their previous peak, pushing the global aircraft backlog to a record 17,000 units. If this backlog is primarily due to delivery delays, it suggests airlines are short by roughly 5,400 aircraft — about 18% of the active fleet. With annual production averaging around 2,000 planes, clearing this backlog could take three to five years. The reduced pace of jet deliveries and limited availability of materials for aircraft manufacturing may compel OEMs to cut production, potentially weighing on near-term earnings and cash flow across the aerospace and defense equipment industry.
Zacks Industry Rank Reflects Bright Outlook
The Zacks Aerospace-Defense Equipment industry is housed within the broader Zacks Aerospace sector. It currently carries a Zacks Industry Rank #58, which places it in the top 24% of more than 243 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few aerospace-defense equipment stocks that you may want to add to your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Beats S&P 500 & Sector
The Aerospace-Defense Equipment industry has outperformed both the Zacks S&P 500 composite and its sector in the past year. The stocks in this industry have collectively surged 37.3% in the past year, while the Aerospace sector has soared 25.7%. The Zacks S&P 500 composite has gained 18.1% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of trailing 12-month EV/Sales, which is used for valuing capital-intensive stocks like aerospace-defense equipment, the industry is currently trading at 11.49X compared with the S&P 500’s 5.73X and the sector’s 3.43X.
Over the past five years, the industry has traded as high as 11.49X, as low as 3.71X and at the median of 7.25X.
EV-Sales Ratio TTM
3 Aerospace-Defense Equipment Stocks to Buy
CurtissWright: This North Carolina-based company provides highly engineered products and services for high-performance platforms, and critical applications in key areas such as commercial aerospace and defense electronics, reactor coolant pumps for next-generation nuclear reactors, as well as advanced surface treatment technologies. In September 2025, CurtissWright announced a $200 million expansion of its 2025 share repurchase program, which is now expected to result in record annual share repurchases of more than $450 million in 2025. This share repurchase announcement highlights the company’s financial strength.
The Zacks Consensus Estimate for CW’s 2025 sales indicates a 9.7% improvement from the previous year’s reported number. The estimate for 2025 earnings implies 18.4% growth from last year’s reported figure. CW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price & Consensus: CW
Leonardo DRS: Based in Arlington, VA, this company develops advanced defense technologies for the U.S. military, intelligence agencies and allied forces, specializing in sensing, network computing, force protection, and power and propulsion systems. In September 2025, Leonardo DRS announced the launch of its new product line of high-performance AI-enabled Ground Vehicle Architecture Smart Display systems called Rugged Smart Displays – Ground. This launch should further strengthen Leonardo DRS’ position as a provider of advanced combat smart display technology.
The Zacks Consensus Estimate for DRS’ 2025 sales indicates a 10.9% increase from the previous year’s reported number. The estimate for 2025 earnings implies 19.4% growth from last year’s reported figure. It currently carries a Zacks Rank #2.
Price & Consensus: DRS
BWX Technologies: Based in Lynchburg, VA, this company provides safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration. In September, BWXT clinched a $1.6 billion deal from the Department of Energy’s National Nuclear Security Administration to support the national security mission of establishing a supply of high-purity depleted uranium. This contract should bolster the company’s backlog and revenue generation prospects.
The Zacks Consensus Estimate for BWXT’s 2025 sales calls for a 15.1% improvement from the previous year’s reported number. The estimate for 2025 earnings implies an 11.7% rise from last year’s reported figure. It currently has a Zacks Rank #2.
Price & Consensus: BWXT