3 Aerospace Stocks With Long Term Defense Demand Behind Them

With inflation trends mixed across regions, central banks still data dependent, and oil prices swinging on geopolitics, many investors are looking for sectors where demand is closely tied to long-term government spending rather than short-term consumer cycles. Aerospace and defense stocks fit that description, as these companies supply critical equipment and services that governments typically prioritise through different economic conditions. This article uses our Aerospace And Defense screener, which focuses on companies manufacturing or providing services to the sector, and highlights 3 stocks from the screener that stand out for further research.

Howmet Aerospace (HWM)

Overview: Howmet Aerospace is a Pittsburgh based supplier of highly engineered metal components, fasteners and forged wheels that go into aircraft engines, airframes, defense systems and heavy-duty trucks across major global markets.

Operations: Howmet Aerospace generates most of its revenue from Engine Products at US$4.6b, followed by Fastening Systems at US$1.8b, Engineered Structures at US$1.1b and Forged Wheels at US$1.1b, with a small offset from inter segment sales.

Market Cap: US$109.5b

Investors looking at Howmet Aerospace are seeing a company tightly linked to long term commercial and defense aircraft programs, with strong earnings momentum and 31.6% ROE helping to support its premium P/E and high analyst price targets. The story is not one sided though. Heavy investment in new capacity, high leverage and dependence on a handful of major aerospace customers leave results sensitive to any slowdown in aircraft build rates or supply chain setbacks. With Q2 2026 earnings approaching and analysts expecting further margin progress, the key question is whether the current valuation fairly reflects both the upside from record aircraft backlogs and data center related demand, and the execution and concentration risks that come with it.

Howmet Aerospace’s premium P/E, strong earnings momentum and 31.6% ROE point to a story that many investors may only be half seeing, and the analyst forecasts for Howmet Aerospace could reveal the twist that changes the risk reward balance

BWX Technologies (BWXT)

Overview: BWX Technologies is a Lynchburg based specialist in nuclear components and services, supplying reactors, fuel, precision parts and lifecycle support for U.S. naval fleets, commercial nuclear plants and medical radioisotopes across North America and select international markets.

Operations: BWX Technologies generates most of its revenue from Government Operations at US$2.4b, with Commercial Operations contributing about US$1.0b and small eliminations between segments.

Market Cap: US$17.1b

Investors watching BWX Technologies are seeing a nuclear contractor with a US$6b backlog, long dated U.S. Navy propulsion contracts and growing exposure to small modular reactors, microreactors and medical isotopes. These factors provide visibility on future work and a potential path to higher margin services. At the same time, a high P/E multiple, heavy reliance on government budgets and a balance sheet funded entirely by external debt mean the story depends on continued contract awards, disciplined capital allocation and effective cost control. The key consideration is whether the combination of defense and nuclear energy demand, plus the recent Precision Components acquisition and SMR licensing progress, is enough to justify that premium and compensate for the funding and execution risks.

BWX Technologies sits at the crossroads of defense and nuclear growth, yet its debt funded balance sheet and premium P/E raise sharp questions. The 3 key rewards and 1 important warning sign could show what the market might be missing.

Moog (MOG.A)

Overview: Moog is an East Aurora based engineer and manufacturer of precision motion and fluid control systems that sit inside military and commercial aircraft, space hardware, defense platforms and industrial equipment. This gives it exposure to both long cycle aerospace and faster moving automation and medical demand.

Operations: Moog generates most of its revenue from Space and Defense at US$1.2b, followed by Industrial at US$1.0b, Commercial Aircraft at US$984.7m and Military Aircraft at US$943.8m.

Market Cap: US$12.9b

Moog catches the eye because it sits at the intersection of rising defense, space and automation demand, with record Q2 revenues and earnings and a growing mix of recurring aftermarket and services helping to support margins. At the same time, a high P/E, heavy reliance on defense budgets, tariff pressure on inputs and ongoing cash flow conversion issues mean expectations are already demanding and execution missteps could be punished. Recent moves like the PONAR partnership in Europe, C-UAS progress and board refresh all point to a company leaning into new growth drivers. Investors still need to weigh whether Moog’s premium valuation fairly reflects both the opportunity and these underlying risks.

Moog’s accelerating mix of defense, space and automation work hints at a story the market may not be fully pricing in, and the analyst forecasts for Moog could surface one risk or catalyst that flips expectations.

The three aerospace and defense stocks covered here are only a small sample, as the full screen identifies 66 more companies with equally compelling narratives and different ways to get exposure to long term government and commercial programs in the sector via the Aerospace And Defense screener. Use Simply Wall St to unlock, identify and analyze the specific catalysts and narratives that matter most to you so you can focus on the highest conviction ideas in this space.

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Seeking Fresh Alternatives Beyond Aerospace?

New themes can start breaking out fast, and by the time the crowd catches on, the best entry points are already flying. Consider these fresh ideas as potential ways to get in earlier.

• Target reliable cash generators with sturdy finances by scanning the curated list of solid balance sheet and fundamentals (47 results). This keeps fragile balance sheets out of your way while it matters.
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• Monitor fast moving infrastructure suppliers by tracking the focused 34 power grid technology and infrastructure stocks while capital is still rotating and valuations have not yet fully reflected the latest momentum.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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