The war has pushed up the demand for weapons and ammunition, and the profits of the US defense industry are expected to continue to rise next year.
According to the report of Reuters local time on December 18th quoted by CCTV news, it is estimated that the profit of American defense industry will continue to rise in 2024. In the context of the ongoing conflict between Russia and Ukraine and the Palestinian-Israeli conflict, as the United States and its allies purchase weapons and ammunition in large quantities, some large American defense companies believe that there will be strong demand in 2024.
Take the Patriot air defense missile system as an example. The US Army’s demand for missiles of this system will increase from 550 to 650 every year, and the sales alone may increase by about 400 million US dollars every year. In addition, the demand for GMLRS guided rocket system and its required solid rocket engine has also increased significantly.
Tim Cahill, who is in charge of Lockheed Martin LMT.N’s missile business, said in an interview that the demand for weapons and ammunition is not expected to decrease.
According to three sources, shortly after the outbreak of the conflict between Russia and Ukraine, the Pentagon immediately convened a meeting of the largest defense contractors to ask them to increase production.
In the past two years, the share prices of many large military enterprises have greatly outperformed the Standard & Poor’s 500 Index. According to Wall Street’s prediction, the share prices of these companies will continue to rise in the future. Among them, the share prices of Lockheed Martin, General Dynamics GD.N and Northrop Grumman NOC.N are expected to increase by 5%-7% in the coming year.
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