"Lockheed Martin's stock has climbed 24.21% over the past year and trades at a trailing P/E of roughly 26x on full-year 2025 EPS of $21.49. For a defense contractor expected to grow revenue at 5% annually in the coming years, that is not a bargain."
"Rheinmetall, as Germany's premier land systems and ammunition manufacturer, sits directly in that spending wave. European defense expenditure reached an estimated 2.1% of EU member states' GDP in 2025, up from 1.6% in 2023."
"Europe is seeking significantly more autonomy, especially as the U.S. is showing signs that it might wind down support for Ukraine against Russia, leaving that up to Europe."
"For Europe to arm Ukraine by itself, it needs to massively invest in its manufacturing, which it has been doing so since 2022."
Lockheed Martin's stock has risen 24.21% over the past year, trading at a trailing P/E of 26x, but its net income declined by 5.98%. The company carries significant debt and is not growing fast enough to justify its valuation. In contrast, Rheinmetall has seen minimal stock movement but is poised for growth due to structural increases in European defense spending, driven by NATO commitments. The demand for defense investment is expected to rise significantly, benefiting Rheinmetall as Europe seeks greater autonomy in defense manufacturing.
Read at 24/7 Wall St.
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