8 Best Defense Stocks to Buy Now

For those of you looking for some insurance after the bit of sliding the stock market has taken in January after the huge December rally, here are the latest recommendation for defense stocks courtesy of this week's edition of U.S. News Invested.  

JANUARY 12, 2024 Invested Advice, rankings and stock market news for investors.

Happy Friday, investors! Stocks trade sideways as a hotter-than-expected December inflation print dampens rate-cut hopes. Highlights of today's newsletter include our market insights plus these new articles: 8 Best Defense Stocks to Buy Now Spot Bitcoin ETFs: How to Invest After Their SEC Approval The 7 Best REIT ETFs to Buy Right Now 7 Best Semiconductor ETFs to Buy in 2024 Fidelity vs. Charles Schwab: Which Is the Right Choice for You? Invested will return on Tuesday, after the observance of Martin Luther King Jr. Day (see stock market holidays in 2024). TODAY'S FEATURED STOCK STORY 8 Best Defense Stocks to Buy Now The fiscal 2024 National Defense Authorization Act calls for $886.3 billion in U.S. military spending, up 3.3% from 2023 levels. However, the dynamics in the defense industry changed dramatically when Israel declared war on Hamas in October 2023. The war in the Middle East may force the U.S. government to increase defense industry investment in coming years, and defense stocks have jumped since the conflict began. Defense stocks are attractive investments because they often have predictable, long-term government contracts. Here are eight defense stocks to buy with big upside potential, according to Morgan Stanley: Northrop Grumman Corp. (ticker: NOC). Northrop Grumman is one of the world's largest weapons and military technology producers. Analyst Kristine Liwag says that Northrop is generating impressive order momentum and that the company's 2024 guidance of between 4% and 5% revenue growth is likely conservative given the recent spike in munitions and air defense-related demand. Morgan Stanley has an "overweight" rating and $601 price target for NOC stock, which closed at $471.95 on Jan. 10. TransDigm Group Inc. (TDG). TransDigm designs and manufactures original aircraft parts sold to manufacturers, and produces aftermarket replacement parts sold to commercial and military aircraft operators. In November, TransDigm announced a $1.4 billion acquisition of the components and subsystems business of Communications & Power Industries. The stock also initially jumped more than 8% when TransDigm announced a special cash dividend of $35 per share and issued upbeat guidance for 2024. Morgan Stanley has an "overweight" rating and $1,200 price target for TDG stock, which closed at $1,015 on Jan. 10. Click here to continue reading.   Here are eight defense stocks to buy with big upside potential, according to Morgan Stanley: STOCK IMPLIED UPSIDE FROM JAN. 10 CLOSE Northrop Grumman Corp. (ticker: NOC) 27.3% TransDigm Group Inc. (TDG) 18.2% L3Harris Technologies Inc. (LHX) 37.1% Howmet Aerospace Inc. (HWM) 8% Textron Inc. (TXT) 12.5% Curtiss-Wright Corp. (CW) 4.8% CAE Inc. (CAE) 23.2% Joby Aviation Inc. (JOBY) 64.7%