The defense sector has been experiencing a period of uncertainty. Investors are concerned that U.S. President Donald Trump’s drive for efficiency, wavering support for Ukraine, and push for Europe to take on more of its defense costs could lead to reduced military spending in the U.S. However, Citi analyst Jason Gursky stated in last week’s report that it is “time to buy.”
Gursky argues that current defense stock valuations assume U.S. defense revenue will remain flat “indefinitely,” a scenario he considers unlikely and overly conservative. The analyst anticipates that the passage of the federal government’s 2025 budget, the introduction of a 2026 budget, and contract awards from U.S. and European governments could help alleviate concerns.
