Benzinga - by Aaron Bry, Benzinga Editor.
When Russia attacked Ukraine in early 2022, defense contractor company Lockheed Martin Corp (NYSE: LMT) saw its stock spike nearly 40% between late December 2021 and February 2022. During that timeframe, RTX Corp (NYSE: RTX) rose by more than 25%.
Today, the scenario is different. Lockheed’s stock is down more than 6% year-to-date. RTX’s is down more than 17%.
Northrop Grumman Corp (NYSE: NOC) is also losing value, with its stock down more than 11%.
Meanwhile, the rest of the market is rallying: The SPDR S&P 500 ETF Trust (NYSEARCA: SPY) is up nearly 20% year-to-date.
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The recent decline in valuation among defense stocks comes as Israel expands its ground offensive into Southern Gaza.
It’s possible that investors speculated that Russia and Ukraine’s conflict would lead to more and more global superpowers getting involved in the war, and thus creating a tailwind for companies like Lockheed and RTX.
Those same investors have been less than impressed with Lockheed and RTX’s outlooks this year, with their stocks getting battered and underperforming the overall market.
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