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US OKs $200M Military Aid to Ukraine: Defense Stocks to Benefit
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The U.S. administration announced on Mar 12 that President Biden had sanctioned up to $200 million in military aid for Ukraine following the latter’s request for more defense equipment from America so that it can defend itself against the heavy shelling by Russia. In particular, this security aid includes dispatch of additional small tanks, anti-tank and anti-aircraft weapons to Ukraine.
This authorization news is expected to once again boost aerospace-defense stocks, which have already been rallying over the past two weeks, buoyed by the Russia-Ukraine conflict. So, if you have a keen interest in U.S. defense stocks, you may keep a close watch on Lockheed Martin (LMT - Free Report) , General Dynamics (GD - Free Report) and BAE Systems (BAESY - Free Report) as these are expected to gain from the latest development.
U.S. Defense Stocks Link to Russia-Ukraine Crisis
Russia hurled its first round of missiles targeting Ukrainian cities on Feb 24, thereby officially starting a hostile conquest in the 21st century following the Taliban’s invasion in Afghanistan last year. However, the conflict between Russia and Ukraine dates back centuries, with the latest discord commencing in 2014, when anti-government protests toppled the then Ukrainian government and Russia annexed Crimea. Following this a war-like situation developed in the eastern part of Ukraine between the local military and Russia-backed separatist rebels.
Although a bunch of peace accords in 2014 and 2015 simmered down the tension between these two nations, it was short-lived, as is evident from the latest invasion made by Russia in Ukraine. It is imperative to mention here that America has been assisting Ukraine both economically and in terms of defense ever since the latter declared its independence from the Soviet Union more than 30 years ago. Since 2014, the United States has committed more than $5.6 billion in total assistance to Ukraine, including security and non-security assistance. In 2021 alone, America committed over $650 million in security assistance to this nation.
Moreover, the United States committed over $3 billion in training and equipment to help Ukraine preserve its territorial integrity, secure its borders, and improve interoperability with NATO.
Coming to the latest security aid of $200 million, “the total U.S. security assistance to Ukraine is more than $1.2 billion since January 2021," as tweeted by the White House. Obviously, this additional military aid opens avenues for U.S. defense stocks to win contracts for supplying their combat-proven equipment to Ukraine.
Stocks to Gain
The aforementioned discussion brings the spotlight on the following U.S. defense stocks that have already established a strong presence in Ukraine and are thus expected to benefit from the latest military aid announcement.
Lockheed Martin is the manufacturer of Javelin anti-armor systems, which form an integral part of the security assistance package offered by the Biden administration to Ukraine. At least 280 Russian armored vehicles have been destroyed with the Javelin missile, out of 300 shots fired, journalist Jack Murphy said in an article quoting a U.S. Special Operations official. Such a success rate for this weapon is expected to boost contract wins for Lockheed from Ukraine in the coming days, thereby pushing up LMT’s revenues.
The company has a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for 2022 earnings indicates growth of 18.4% from the 2021 reported figure.
General Dynamics builds combat tanks like Abrams. Interestingly, amid the rising threat from Russia against Ukraine, The U.S. Department of State cleared the sale of 250 M1A2 Abrams SEPv3 tanks and other military equipment, estimated at almost $6 billion, to Poland, in a bid to corner Russia. Such a huge contract will boost GD’s revenues and pave the way for more contract wins.
The company has a long-term earnings growth rate of 9.6%. The Zacks Consensus Estimate for 2022 earnings implies growth of 4.9% from the 2021 reported figure.
BAE Systems manufactures M88 heavy vehicles that are utilized for recovery and evacuation missions in combat. The aforementioned $6 billion defense equipment sales to Poland include the supply of 26 M88 recovery vehicles. This should boost BAESY’s revenues and poise it well for more contract wins.
The company has a long-term earnings growth rate of 5.3%. The Zacks Consensus Estimate for 2022 earnings implies growth of 22.3% from the 2021 reported figure.
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US OKs $200M Military Aid to Ukraine: Defense Stocks to Benefit
The U.S. administration announced on Mar 12 that President Biden had sanctioned up to $200 million in military aid for Ukraine following the latter’s request for more defense equipment from America so that it can defend itself against the heavy shelling by Russia. In particular, this security aid includes dispatch of additional small tanks, anti-tank and anti-aircraft weapons to Ukraine.
This authorization news is expected to once again boost aerospace-defense stocks, which have already been rallying over the past two weeks, buoyed by the Russia-Ukraine conflict. So, if you have a keen interest in U.S. defense stocks, you may keep a close watch on Lockheed Martin (LMT - Free Report) , General Dynamics (GD - Free Report) and BAE Systems (BAESY - Free Report) as these are expected to gain from the latest development.
U.S. Defense Stocks Link to Russia-Ukraine Crisis
Russia hurled its first round of missiles targeting Ukrainian cities on Feb 24, thereby officially starting a hostile conquest in the 21st century following the Taliban’s invasion in Afghanistan last year. However, the conflict between Russia and Ukraine dates back centuries, with the latest discord commencing in 2014, when anti-government protests toppled the then Ukrainian government and Russia annexed Crimea. Following this a war-like situation developed in the eastern part of Ukraine between the local military and Russia-backed separatist rebels.
Although a bunch of peace accords in 2014 and 2015 simmered down the tension between these two nations, it was short-lived, as is evident from the latest invasion made by Russia in Ukraine. It is imperative to mention here that America has been assisting Ukraine both economically and in terms of defense ever since the latter declared its independence from the Soviet Union more than 30 years ago. Since 2014, the United States has committed more than $5.6 billion in total assistance to Ukraine, including security and non-security assistance. In 2021 alone, America committed over $650 million in security assistance to this nation.
Moreover, the United States committed over $3 billion in training and equipment to help Ukraine preserve its territorial integrity, secure its borders, and improve interoperability with NATO.
Coming to the latest security aid of $200 million, “the total U.S. security assistance to Ukraine is more than $1.2 billion since January 2021," as tweeted by the White House. Obviously, this additional military aid opens avenues for U.S. defense stocks to win contracts for supplying their combat-proven equipment to Ukraine.
Stocks to Gain
The aforementioned discussion brings the spotlight on the following U.S. defense stocks that have already established a strong presence in Ukraine and are thus expected to benefit from the latest military aid announcement.
Lockheed Martin is the manufacturer of Javelin anti-armor systems, which form an integral part of the security assistance package offered by the Biden administration to Ukraine. At least 280 Russian armored vehicles have been destroyed with the Javelin missile, out of 300 shots fired, journalist Jack Murphy said in an article quoting a U.S. Special Operations official. Such a success rate for this weapon is expected to boost contract wins for Lockheed from Ukraine in the coming days, thereby pushing up LMT’s revenues.
The company has a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for 2022 earnings indicates growth of 18.4% from the 2021 reported figure.
General Dynamics builds combat tanks like Abrams. Interestingly, amid the rising threat from Russia against Ukraine, The U.S. Department of State cleared the sale of 250 M1A2 Abrams SEPv3 tanks and other military equipment, estimated at almost $6 billion, to Poland, in a bid to corner Russia. Such a huge contract will boost GD’s revenues and pave the way for more contract wins.
The company has a long-term earnings growth rate of 9.6%. The Zacks Consensus Estimate for 2022 earnings implies growth of 4.9% from the 2021 reported figure.
BAE Systems manufactures M88 heavy vehicles that are utilized for recovery and evacuation missions in combat. The aforementioned $6 billion defense equipment sales to Poland include the supply of 26 M88 recovery vehicles. This should boost BAESY’s revenues and poise it well for more contract wins.
The company has a long-term earnings growth rate of 5.3%. The Zacks Consensus Estimate for 2022 earnings implies growth of 22.3% from the 2021 reported figure.