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Forget Lockheed and Northrop. 5 European Defense Stocks to Buy Right Now. - Barron's

1. Jefferies initiates coverage on military-related stocks amid European defense budget growth. 2. European defense spending could rise to 3.5% of GDP, generating $200 billion annually. 3. Concerns about U.S. support for Ukraine contributing to defense shifts in Europe. 4. Lockheed Martin shares down 13% since Nov 5, underperforming the S&P 500. 5. Short-cycle production focus favored, which may benefit some defense contractors.

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FAQ

Why Bearish?

LMT's underperformance compared to the expanding European defense market suggests weakening competitive positioning. Historically, downturns in defense-related stocks often correlate with market-wide shifts in spending priorities.

How important is it?

The article discusses shifts in European defense budgets crucial for LMT’s market environment. The focus on European spending directly indicates potential revenue impacts for established defense contractors.

Why Short Term?

Current market sentiment affected by political changes can drive immediate impacts. Similar past instances occurred post-elections, with quick shifts in defense budgeting priorities influencing stock performance.

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