Defence stocks have wobbled in recent weeks after president-elect Donald Trump took to his Truth Social platform to call for “an immediate ceasefire” in Ukraine.
Tip style
Value
Risk rating
Medium
Timescale
Long Term
Bull points
- Surge in demand since Russia's invasion of Ukraine
- Convincing capex strategy
- Earnings growth is expected to accelerate
- Cheaper than peers
Bear points
- Patchy track record
- Lots of investment in the near term
The prospect of the conflict ending suddenly has clearly caused some investors to take flight, and given the likes of BAE Systems (BA.) and Aim-traded Cohort (CHRT) have doubled in value since the war began, a desire to bank profits is understandable. Yet even if a ceasefire is called, the heightened threat to Europe’s borders looks set to remain.