Aerospace and defense stocks are on the move Monday following positive analyst coverage amid the ongoing Russia-Ukraine conflict.
Virtus Investment Partners' Joe Terranova sees significant upside potential in Lockheed Martin Corp (NYSE:LMT), Northrop Grumman Corp (NYSE:NOC) and Raytheon Technologies Corp (NYSE:RTX), despite Monday's outperformance.
"I think all three of these names you could buy today," Terranova said Monday on CNBC's "Fast Money Halftime Report."
Institutions have been significantly underweighting these names for more than a year, he emphasized: "Very slowly, that underweight is being rebuilt toward market weight at best."
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From a sentiment and ownership perspective, these names are not even close to overweight, he said, adding that defense stocks just don't get talked about, which has created an opportunity to buy.
"There's a lot more to go here in these stocks and it's based on positioning and sentiment," Terranova said.
Market Rebellion co-founder Pete Najarian and Cerity Partners' Jim Lebenthal both agreed with Terranova, although Lebenthal noted he would wait a week or two before initiating a position.
LMT, NOC, RTX Price Action: Lockheed gained 6.67% to $433.80 in Monday's session. Northrop Grumman was up 7.93% at $442.14 and Raytheon was up 4.67% at $102.70.
Photo: courtesy of Lockheed Martin.
