Hensoldt Stock And 2 Defense Shares Riding Europe’s Rearmament Push

Political turmoil in Ukraine, including protests, ministerial changes and questions over defence leadership, is rippling through global markets and drawing fresh attention to defense and aerospace stocks with exposure to the news. For investors, this kind of disruption can reshape risk, contract visibility and sentiment toward companies tied to procurement, drones and military equipment. This article breaks down how the latest developments might affect selected stocks from a Defense and Aerospace Sector Stocks screener and reveals 3 stocks that appear positively exposed to the news, helping you decide whether they deserve a closer look or a wider berth in your portfolio.

Civmec (ASX:CVL)

Overview: Civmec (ASX:CVL) is an Australian construction and engineering contractor that builds and maintains large industrial, energy, resources, infrastructure, marine and defence projects, from structural steel and shipbuilding to civil works, electrical systems and maintenance services.

Operations: Civmec generates about A$96.7m from Energy projects, A$456.9m from Resources and A$134.5m from Infrastructure, Marine & Defence, with all reported revenue of A$688.2m coming from Australia.

Market Cap: A$894.4m

Civmec stands out in this defence and aerospace context because it already supplies heavy engineering into military platforms and naval vessels, while also holding a broad A$1.5b order book across resources, infrastructure and energy. This can support utilisation and cash flow visibility. One estimate of fair value suggests the stock trades below fair value, with an internal DCF indicating potential upside, and analysts expect double digit annual revenue and earnings growth. The company recently saw earnings decline and net margins sit around 5.4%. A relatively new leadership team and reliance on external borrowings add execution and funding risk. For investors comfortable with contractor cycles, Civmec’s mix of defence exposure and diversified industrial work could be worth a closer look.

Civmec’s order book and defence exposure hint at a story where valuation and growth expectations may not fully line up with the current share price. Get the full picture with the DCF valuation analysis for Civmec

MTU Aero Engines (XTRA:MTX)

Overview: MTU Aero Engines (XTRA:MTX) develops, manufactures and services commercial and military aircraft engines and industrial gas turbines, supplying propulsion systems and spare parts for everything from fighter jets to regional jets and wide body aircraft.

Operations: MTU Aero Engines generates €2.9b from Segment Adjustment activities and €6.1b from its Commercial Maintenance Business (MRO), partly offset by a €87m consolidation and reconciliation adjustment.

Market Cap: €18.8b

MTU Aero Engines gives you exposure to both military and commercial aviation at a time when demand for fuel efficient engines and high margin maintenance services is supporting recurring revenue, while current tensions in Ukraine keep defence readiness and propulsion upgrades firmly on government agendas. Earnings growth has been strong, profitability is reported as solid with an 11.2% net margin and high return on equity, yet the stock trades at a P/E below sector averages according to recent data. The catch is that MTU is tied to a few key engine programs and relies on external borrowing, so supply chain issues, technical problems or higher financing costs could affect margins. The balance between these strengths and risks is a key consideration for patient investors.

MTU Aero Engines sits at the crossroads of recurring MRO revenue and defence demand, yet its P/E is below sector averages. See how that mix shows up in the analysis report for MTU Aero Engines for one detail the market may be missing.

Hensoldt (XTRA:HAG)

Overview: Hensoldt (XTRA:HAG) is a German defence electronics company that builds the radar, sensors, electronic warfare and optronics equipment that help armed forces detect, track and protect against threats in the air, on land, at sea and in cyberspace.

Operations: Hensoldt generates about €2.1b in revenue from its Sensors segment and €457m from Optronics, with a smaller negative contribution of €21m from eliminations and other items, and most sales recorded in Germany and wider Europe.

Market Cap: €8.5b

Hensoldt sits at the heart of Europe’s push to upgrade defence capabilities, supplying radar, electronic warfare and air defence sensors that are directly relevant as Ukraine’s political turmoil keeps threat detection and procurement in focus. Analysts highlight the potential for revenue and earnings growth, and recent Q1 2026 results show higher revenue alongside a reduced net loss. However, the stock already trades on a high P/E and relies on external funding, so expectations are demanding and balance sheet risk matters. With Germany’s defence budgets and procurement frameworks under scrutiny, the key question for investors is whether Hensoldt’s order visibility and planned expansion can justify that optimism or leave little margin for disappointment.

Hensoldt’s accelerating order visibility and high P/E suggest investors may be missing how its sensor footprint could reshape future earnings. Get the full story in the analyst forecasts for Hensoldt and see what might be hiding in plain sight.

The three stocks covered here are only a starting point, with the full Defense and Aerospace Sector Stocks screener surfacing 8 more companies that carry equally compelling defence and aerospace narratives tied to procurement, drones and military technology. Use Simply Wall St to identify the specific catalysts, risk profiles and contract stories that matter most to you so you can analyze and rank the highest conviction opportunities across the sector.

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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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