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Buy 4 Aerospace Defense Behemoths to Enhance Your Portfolio Returns
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Key Takeaways
GE Aerospace raised its 2026 revenue, operating profit, adjusted EPS and free cash flow forecasts.
Howmet Aerospace benefits from strong commercial and defense aerospace demand, raising its 2026 outlook.
RTX and Lockheed Martin boast record backlogs, major defense contracts and improved 2026 financial guidance.
The Zacks-defined Aerospace-Defense industry is benefiting from rising geopolitical tensions, higher military spending and continued air-travel demand, as governments accelerate defense modernization and invest in advanced weapons.
Long-term defense procurement and lifecycle-support programs are also providing contractors with greater revenue visibility and earnings stability. In January 2026, President Donald Trump proposed raising U.S. military spending to about $1.5 trillion in 2027. Such higher funding levels should strengthen the industry’s growth prospects.
At this stage, it will be prudent to invest in aerospace defense stocks with a favorable Zacks Rank for the rest of 2026. Four such stocks are GE Aerospace (GE - Free Report) , Howmet Aerospace Inc. (HWM - Free Report) , RTX Corp. (RTX - Free Report) and Lockheed Martin Corp. (LMT - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
GE Aerospace
Zacks Rank #2 GE Aerospace benefits from rising demand for commercial engines and aftermarket services, supported by fleet expansion and higher aircraft utilization. Growing defense orders and investments in production and repair capacity further support GE’s long-term prospects. GE’s improved operational execution, healthy cash generation and shareholder-friendly policies are encouraging.
Strong Outlook
GE expects 2026 adjusted revenue growth of approximately 19-20% compared with its prior high-teens forecast. Adjusted operating profit is projected to be in the band of $10.9-$11.0 billion, up from $10.55-$10.75 billion. The adjusted earnings outlook increased to $8.00-$8.10 per share from $7.65-$7.85.
Free cash flow is expected between $9.1 billion and $9.4 billion versus $8.9-$9.2 billion earlier. CES’ revenues are projected to grow at a low-20s rate, with operating profit of $10.5-$10.6 billion. DPT’s revenues are projected to rise at a low-double-digit pace, with operating profit of $1.6-$1.7 billion.
Solid Estimate Revisions
GE Aerospace has an expected revenue and earnings growth rate of 19.7% and 27.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2.8% over the last 30 days.
It has an expected revenue and earnings growth rate of 12% and 14.3%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 2.8% over the last 30 days.
Howmet Aerospace Inc.
Zacks Rank #2 Howmet Aerospace is benefiting from solid momentum in the commercial aerospace market, driven by robust build rates and wide-body aircraft recovery. HWM is also witnessing strength in its defense aerospace business.
Robust orders for engine spares for the F-35 program and other legacy fighters augur well for HWM’s defense aerospace unit. Given the strength in most of its served markets, HWM has built a sound liquidity position that supports its shareholder-friendly policies. Benefits from acquired assets are contributing to the company’s performance of late.
Strong Outlook
For the fourth quarter of 2026, Howmet Aerospace expects revenues of $2.74-$2.76 billion. Adjusted EBITDA is projected between $895 million and $905 million, while adjusted earnings are expected in the range of $1.49-$1.51 per share.
For 2026, HWM raised its revenue outlook to $10.29-$10.31 billion. Adjusted EBITDA is now anticipated between $3.325 billion and $3.335 billion, with adjusted earnings projected at $5.49-$5.51 per share.
Solid Estimate Revisions
Howmet Aerospace has an expected revenue and earnings growth rate of 24.1% and 45.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.6% over the last 30 days.
It has an expected revenue and earnings growth rate of 13.2% and 18.6%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 3% over the last 30 days.
RTX Corp.
Zacks Rank #1 RTX is supported by a steady recovery in commercial aerospace, strong defense orders and a robust backlog. Rising global air traffic, higher commercial OEM and aftermarket sales, and strong demand for large commercial engines should aid growth.
RTX ended the third quarter of 2026 with a record backlog of $340 billion, up 36% year over year, including $164 billion of defense work. The company recorded more than $81 billion of new awards in the quarter, with nearly $59 billion in defense bookings. Raytheon secured approximately $23 billion for Tomahawk and more than $14 billion for AMRAAM under multi-year production contracts.
RTX also signed multi-year contracts for SM-6 and SM-3 Block IB in October 2026, bringing the combined value of these four agreements to approximately $70 billion. Other awards included $3.1 billion for British Army training systems, $3 billion of classified awards and $1.8 billion for SPY-6 production.
Strong Outlook
RTX raised its 2026 adjusted sales guidance to $97.0-$97.5 billion from $95.0-$96.0 billion. The company now expects organic sales growth of 10-11% compared with its prior projection of 8-9%.
Adjusted earnings are projected to be between $7.65 and $7.75 per share, up from $7.10-$7.25. Free cash flow is expected to range from $9.0 billion to $9.2 billion compared with the previous forecast of $8.50-$8.75 billion.
Solid Estimate Revisions
RTX has an expected revenue and earnings growth rate of 10.1% and 22.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 7.1% over the last 30 days.
It has an expected revenue and earnings growth rate of 7% and 4.5%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 4% over the last 30 days.
Lockheed Martin Corp.
Zacks Rank #2 Lockheed Martin’s record backlog, multiyear missile agreements and expanding production capacity support sustained revenue growth. Higher F-35 production, sustainment demand and rising allied defense investment reinforce LMT’s competitive position. Third-quarter growth across all businesses and increased cash-flow guidance provide further support.
LMT’s backlog reached a record $292 billion as of Sept. 27, 2026, compared with $230 billion at the end of the second quarter. Third-quarter 2026 book-to-bill reached 4.0, reflecting substantial new orders.
The seven-year PAC-3 agreement contributed to a multiyear contract valued at up to $58.6 billion, alongside the earlier seven-year THAAD agreement worth $35 billion. Additional awards included $4.4 billion for 34 C-130J aircraft and contracts covering GMLRS, F-35 and space programs.
Strong Outlook
Lockheed Martin expects to generate sales in the range of $80.00-$82.00 billion in 2026 compared with its previous guidance of $79.75-$81.75 billion. The Zacks Consensus Estimate is pegged at $81.34 billion, which lies above the midpoint of the company’s sales guidance.
LMT expects to generate adjusted EPS in the range of $30.35-$30.75 compared with its previous guidance of $29.95-$30.65. The consensus estimate is currently pegged at $30.59 per share.
Management expects to generate cash from operations in the range of $10.00-$10.20 billion. It expects capital expenditures of approximately $2.10-$2.30 billion. LMT expects to generate free cash flow of approximately $7.80-$8.00 billion.
Solid Estimate Revisions
Lockheed Martin has an expected revenue and earnings growth rate of 8.6% and 32.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the last 30 days.
It has an expected revenue and earnings growth rate of 6.2% and 9.8%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 19.1% over the last 30 days.
View the Zacks #1 Rank List
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Buy 4 Aerospace Defense Behemoths to Enhance Your Portfolio Returns
Key Takeaways
The Zacks-defined Aerospace-Defense industry is benefiting from rising geopolitical tensions, higher military spending and continued air-travel demand, as governments accelerate defense modernization and invest in advanced weapons.
Long-term defense procurement and lifecycle-support programs are also providing contractors with greater revenue visibility and earnings stability. In January 2026, President Donald Trump proposed raising U.S. military spending to about $1.5 trillion in 2027. Such higher funding levels should strengthen the industry’s growth prospects.
At this stage, it will be prudent to invest in aerospace defense stocks with a favorable Zacks Rank for the rest of 2026. Four such stocks are GE Aerospace (GE - Free Report) , Howmet Aerospace Inc. (HWM - Free Report) , RTX Corp. (RTX - Free Report) and Lockheed Martin Corp. (LMT - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
GE Aerospace
Zacks Rank #2 GE Aerospace benefits from rising demand for commercial engines and aftermarket services, supported by fleet expansion and higher aircraft utilization. Growing defense orders and investments in production and repair capacity further support GE’s long-term prospects. GE’s improved operational execution, healthy cash generation and shareholder-friendly policies are encouraging.
Strong Outlook
GE expects 2026 adjusted revenue growth of approximately 19-20% compared with its prior high-teens forecast. Adjusted operating profit is projected to be in the band of $10.9-$11.0 billion, up from $10.55-$10.75 billion. The adjusted earnings outlook increased to $8.00-$8.10 per share from $7.65-$7.85.
Free cash flow is expected between $9.1 billion and $9.4 billion versus $8.9-$9.2 billion earlier. CES’ revenues are projected to grow at a low-20s rate, with operating profit of $10.5-$10.6 billion. DPT’s revenues are projected to rise at a low-double-digit pace, with operating profit of $1.6-$1.7 billion.
Solid Estimate Revisions
GE Aerospace has an expected revenue and earnings growth rate of 19.7% and 27.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2.8% over the last 30 days.
It has an expected revenue and earnings growth rate of 12% and 14.3%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 2.8% over the last 30 days.
Howmet Aerospace Inc.
Zacks Rank #2 Howmet Aerospace is benefiting from solid momentum in the commercial aerospace market, driven by robust build rates and wide-body aircraft recovery. HWM is also witnessing strength in its defense aerospace business.
Robust orders for engine spares for the F-35 program and other legacy fighters augur well for HWM’s defense aerospace unit. Given the strength in most of its served markets, HWM has built a sound liquidity position that supports its shareholder-friendly policies. Benefits from acquired assets are contributing to the company’s performance of late.
Strong Outlook
For the fourth quarter of 2026, Howmet Aerospace expects revenues of $2.74-$2.76 billion. Adjusted EBITDA is projected between $895 million and $905 million, while adjusted earnings are expected in the range of $1.49-$1.51 per share.
For 2026, HWM raised its revenue outlook to $10.29-$10.31 billion. Adjusted EBITDA is now anticipated between $3.325 billion and $3.335 billion, with adjusted earnings projected at $5.49-$5.51 per share.
Solid Estimate Revisions
Howmet Aerospace has an expected revenue and earnings growth rate of 24.1% and 45.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.6% over the last 30 days.
It has an expected revenue and earnings growth rate of 13.2% and 18.6%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 3% over the last 30 days.
RTX Corp.
Zacks Rank #1 RTX is supported by a steady recovery in commercial aerospace, strong defense orders and a robust backlog. Rising global air traffic, higher commercial OEM and aftermarket sales, and strong demand for large commercial engines should aid growth.
RTX ended the third quarter of 2026 with a record backlog of $340 billion, up 36% year over year, including $164 billion of defense work. The company recorded more than $81 billion of new awards in the quarter, with nearly $59 billion in defense bookings. Raytheon secured approximately $23 billion for Tomahawk and more than $14 billion for AMRAAM under multi-year production contracts.
RTX also signed multi-year contracts for SM-6 and SM-3 Block IB in October 2026, bringing the combined value of these four agreements to approximately $70 billion. Other awards included $3.1 billion for British Army training systems, $3 billion of classified awards and $1.8 billion for SPY-6 production.
Strong Outlook
RTX raised its 2026 adjusted sales guidance to $97.0-$97.5 billion from $95.0-$96.0 billion. The company now expects organic sales growth of 10-11% compared with its prior projection of 8-9%.
Adjusted earnings are projected to be between $7.65 and $7.75 per share, up from $7.10-$7.25. Free cash flow is expected to range from $9.0 billion to $9.2 billion compared with the previous forecast of $8.50-$8.75 billion.
Solid Estimate Revisions
RTX has an expected revenue and earnings growth rate of 10.1% and 22.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 7.1% over the last 30 days.
It has an expected revenue and earnings growth rate of 7% and 4.5%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 4% over the last 30 days.
Lockheed Martin Corp.
Zacks Rank #2 Lockheed Martin’s record backlog, multiyear missile agreements and expanding production capacity support sustained revenue growth. Higher F-35 production, sustainment demand and rising allied defense investment reinforce LMT’s competitive position. Third-quarter growth across all businesses and increased cash-flow guidance provide further support.
LMT’s backlog reached a record $292 billion as of Sept. 27, 2026, compared with $230 billion at the end of the second quarter. Third-quarter 2026 book-to-bill reached 4.0, reflecting substantial new orders.
The seven-year PAC-3 agreement contributed to a multiyear contract valued at up to $58.6 billion, alongside the earlier seven-year THAAD agreement worth $35 billion. Additional awards included $4.4 billion for 34 C-130J aircraft and contracts covering GMLRS, F-35 and space programs.
Strong Outlook
Lockheed Martin expects to generate sales in the range of $80.00-$82.00 billion in 2026 compared with its previous guidance of $79.75-$81.75 billion. The Zacks Consensus Estimate is pegged at $81.34 billion, which lies above the midpoint of the company’s sales guidance.
LMT expects to generate adjusted EPS in the range of $30.35-$30.75 compared with its previous guidance of $29.95-$30.65. The consensus estimate is currently pegged at $30.59 per share.
Management expects to generate cash from operations in the range of $10.00-$10.20 billion. It expects capital expenditures of approximately $2.10-$2.30 billion. LMT expects to generate free cash flow of approximately $7.80-$8.00 billion.
Solid Estimate Revisions
Lockheed Martin has an expected revenue and earnings growth rate of 8.6% and 32.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the last 30 days.
It has an expected revenue and earnings growth rate of 6.2% and 9.8%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 19.1% over the last 30 days.