A big earnings week coming up gives defense and aerospace stocks the chance to build on early earnings season momentum established by GE Aerospace. GE kicked off the industry's Q2 on Thursday by hiking its 2025 and long-term outlooks on top of an earnings beat.
Lockheed Martin, RTX and Northrop Grumman report on Tuesday. General Dynamics is on tap for Wednesday. L3Harris and Textron release earnings on Thursday, followed by Booz Allen Hamilton on Friday.
Analysts See Positive Momentum
Citi analyst Jason Gursky in a Monday research note said momentum across the aerospace and defense sector continues to quicken. He noted that commercial original equipment production rates are on the rise. Meanwhile, aftermarket suppliers are busy keeping up current fleets, and preparing for a potential wave of refurbishment work as airlines take new plane deliveries.
Defense services providers are likely to see a reduction in DOGE-related headlines during the second half of the year, Gursky said. Meanwhile, prime defense contractors are seeing strong demand from domestic and international customers. NATO allies in June agreed to hike their defense spending targets, while President Donald Trump's "One Big Beautiful Bill" is set to increase national defense funding.
Space companies also appear poised to benefit from the evolving geopolitical environment, Gursky noted.
Citi remains "almost exclusively buy-rated" across its aerospace and defense coverage. The firm's top picks include Northrop Grumman, RTX, Lockheed Martin, L3Harris, Karman and Huntington Ingalls.
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Bernstein this week lifted its price targets on Northrop Grumman, Lockheed Martin and General Dynamics, citing more positive budget trends, The Fly reported. The firm believes that Q2 reports could offer a potential inflection point for defense stock performance.
Bernstein raised its price target on NOC stock to 586 from 531. It lifted its target for LMT to 551 from 540. Bernstein hiked its price target for GD stock to 314 from 295. The firm kept a market perform rating on all three of the stocks.
Morgan Stanley on Thursday raised its price targets on RTX and Textron, according to The Fly. The firm noted that aerospace stocks are trading at record multiples, which it believes reflects sector resilience. Morgan Stanley expects industry dynamics to "largely remain on trend," and added that supply chains continue to improve.
Morgan Stanley raised its price target on RTX to 165 from 135 and kept an overweight rating on the shares. It lifted its price target on Textron by 15 to 86 and maintained an equal weight rating on the stock.
GE Aerospace Kicks Off Earnings
GE Aerospace on Thursday reported a 38% increase in earnings on a 21% jump in revenue. Commercial engine sales rose 30%, with a 28% increase in commercial orders. Defense and propulsion technology revenue climbed 7%, with a 24% increase in orders. The engine manufacturer lifted its 2025 and 2028 outlooks along with the beat. GE Aerospace now expects 2025 earnings to range from $5.60 to $5.80 per share adjusted, with the midpoint ahead of FactSet forecasts.
Lockheed Martin, Earnings Expectations
FactSet expects Lockheed Martin to report an 8% decline in earnings to $6.52 per share on 2.5% revenue growth to $18.57 billion.
RTX earnings are expected to rise 3 cents to $1.44 per share on 4.3% revenue growth to $20.63 billion.
Analysts predict Northrop Grumman will report earnings of $6.84 per share, up from $6.36 per share last year. Analysts see revenue sliding 1.5% to $10.06 billion.
General Dynamics on Wednesday is expected to report about a 9% rise in earnings to $3.55 per share. Revenue is predicted to rise 3.4% to $12.39 billion.
FactSet expects L3Harris on Thursday to report a 23% drop in earnings to $2.48 per share. Analysts predict a slight uptick in revenue to $5.31 billion.
Analysts forecast Textron will report a 9 cent decline in earnings to $1.45 per share on 3% revenue growth to $3.64 billion.
For Booz Allen Hamilton results on Friday, FactSet expects a 5% increase in earnings to $1.45 per share on less than 1% revenue growth to $2.96 billion.
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Lockheed Martin Stock
Lockheed Martin stock is down 4.5% in 2025 and trading below its 50-day line.
RTX stock continues to push to record highs, with a 31% gain so far this year including two breakouts.
Northrop Grumman is trending up the right side of a consolidation, with a 555.57 buy point. NOC stock has struggled to gain almost 11% so far this year.
GD stock is trading near the top of a buy zone for a saucer-with-handle base, above a 286.80 buy point. Shares broke out on June 25. The stock is up 13.5% in 2025.
L3Harris trades in a cup-with-handle buy zone after breaking out above the 257.79 buy point on July 7. LHX stock has rallied 26% so far this year and is approaching its record high from March 2022.
Textron shares have been on an uptrend since April, with a 10% gain in 2025.
BAH shares are attempting to retake their 50-day line. Booz Allen Hamilton has declined 15% this year.
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