Defense Stocks Retail Investors Are Finding After New US Sanctions On Iran

Fresh US sanctions pressure on Iran is rippling through energy, shipping and regional trade, and that can reshape demand for defense and aerospace stocks in unpredictable ways. When routes, risks and budgets shift, money often moves with them. This article walks through 3 stocks from our Global Defense and Aerospace Stocks screener that appear closely exposed to these headlines, and explains how this backdrop could influence their risk and return profiles.

The 3 stocks covered below are just a sample from this theme, and the full screen surfaced 49 more large defense and aerospace companies with equally compelling narratives that are not discussed here. If you want to go straight to the source and size up this universe for yourself, use the Global Defense and Aerospace Stocks screener to identify, filter and analyze the ideas that best fit your own view on risk and reward.

Hensoldt (XTRA:HAG)

Overview: Hensoldt is a German defense electronics company that focuses on sensors such as radar, optronics and electronic warfare systems used in surveillance, air defense, naval platforms and secure communications for Western militaries and security agencies.

Operations: Hensoldt generates about €2.2b of revenue from its Sensors segment and €504 million from Optronics, with Germany contributing €1.6b of sales and the rest of Europe adding €764 million.

Market Cap: €10.0b

Hensoldt provides direct exposure to the defense and aerospace sensor theme, with radar, electronic warfare and space based sensing projects that sit at the center of how Western forces manage surveillance and air defense. A record order book above €10b and strong book to bill ratios indicate multi year revenue visibility. This is paired with a high P/E multiple and heavy investment in new capacity and R&D that could pressure margins if defense budgets or project timing differ from expectations. The company also carries meaningful debt and is scaling complex production, which adds execution and financing risk. The investment case depends on how effectively Hensoldt converts its backlog into higher margin earnings while managing these constraints, as this may not be fully reflected in headline numbers.

Hensoldt’s hefty order book and high P/E suggest investors may be missing how much of that backlog converts into quality earnings versus strain on margins. Scan the 3 key rewards and 1 important warning sign to see what could tip the balance next.

Elbit Systems (TASE:ESLT)

Overview: Elbit Systems is an Israel based defense contractor that supplies a wide range of military and homeland security technologies, including drones, avionics, munitions, cyber and C4I systems, and border surveillance solutions, to Israel, the US and allied governments that are central to the Global Defense and Aerospace Stocks screener theme.

Operations: Elbit Systems generates most of its revenue from its Land segment at about $2.7b, followed by Aerospace at about $2.0b, ESA at about $1.8b, ISTAR and EW at about $1.7b, and C4I and Cyber at about $1.0b, with Israel contributing about $2.9b of sales, Europe about $2.2b and North America about $1.8b.

Market Cap: ₪102.9b

Elbit Systems provides broad exposure to defense and aerospace spending, from artillery rockets and loitering munitions to drones, sensors and cyber systems that governments tend to prioritize when regional risk rises. A record $32b backlog, with roughly three quarters from customers outside Israel, supports multi year visibility and ties directly into programs in Europe and North America that relate to sanctions pressure and border security. At the same time, a rich valuation, heavy capital investment in capacity and advanced tech such as directed energy weapons, and reliance on external borrowing all introduce execution and funding risk if orders slow or budgets are rebalanced. For investors tracking this theme, a key consideration is how much of that backlog turns into durable, high quality earnings as sanctions policy and defense priorities evolve.

Elbit Systems has a $32b backlog that could be masking how much earnings power is still not priced in. Scan the analysis report for Elbit Systems for the one funding and execution twist that could change the story.

Dassault Aviation société anonyme (ENXTPA:AM)

Overview: Dassault Aviation société anonyme designs and builds Rafale fighter jets, military drones, space systems and Falcon business jets for government and civil customers in France, the US and worldwide, which ties it closely to defense procurement and aerospace spending. The company also provides training, maintenance and support services that help keep these aircraft and space platforms in service for decades.

Operations: Dassault Aviation société anonyme generates about €8.9b of revenue from its Aerospace Sector, with reported sales of about €6.4b in France and segment adjustments of roughly €2.3b.

Market Cap: €22.7b

Investors looking at defense stocks linked to higher geopolitical risk may find Dassault Aviation société anonyme hard to ignore, given its role supplying Rafale combat aircraft and advanced electronic warfare capabilities to NATO aligned customers while also building a growing Falcon business jet franchise. Recent results show solid sales and earnings, and the order backlog across both military and civil programs is sizeable. At the same time, heavy reliance on external borrowing, exposure to trade barriers and the impact of one off gains on reported earnings all raise questions about how smooth that journey might be. The key consideration is how these moving pieces fit together when defense demand meets complex funding and regulatory pressures.

Dassault Aviation société anonyme has sizeable aerospace revenue and a thick order backdrop that could be masking the real earnings story. Scan the analysis report for Dassault Aviation société anonyme to see how funding pressure and trade barriers might quietly reshape it.

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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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