With The DOGE Sword Hanging Over Defense Budget, Here's How Boeing, LMT And Others Performed During Trump's First Term

Defense stocks experienced a notable surge during Donald Trump’s first term as President of the United States, with several key players in the industry seeing significant gains. This trend is highlighted by the performance of major companies such as Lockheed Martin Corp. LMT, Boeing Co. BA, L3Harris Technologies Inc. LHX, and General Dynamics Corp. GD.

What Happened: Between Jan. 20, 2017, and Jan. 20, 2021, during Trump’s initial term, defense stocks saw significant gains, according to Benzinga Pro. Lockheed Martin rose by 32.57%, while Boeing increased by 32.55%. L3Harris Technologies experienced a remarkable 88.02% rise, and General Dynamics grew by 13.60%.

What’s Ahead For These Stocks?

Lockheed Martin has a consensus price target of $548.62 from 22 analysts, with a high of $700 from Citigroup and a low of $332 from Goldman Sachs. Recent ratings from Wells Fargo, Barclays, and RBC Capital suggest a 21.16% upside.

Boeing, which has been facing increasing scrutiny due to multiple flight mishaps and two deadly disasters in the past year, has a consensus target of $197.85 from 23 analysts, with Wolfe Research setting the high at $260 and Wells Fargo the low at $85. Recent ratings imply a 9.32% downside.

L3Harris Technologies has a consensus target of $259.67 from 22 analysts, with Argus Research’s high at $300 and Bernstein’s low at $210. Recent ratings indicate a 39.23% upside.

General Dynamics has a consensus target of $305.47 from 24 analysts, with Citigroup‘s high at $354 and Credit Suisse‘s low at $220. Recent ratings suggest a 4.58% upside.

Why It Matters: The defense sector’s performance during Trump’s first term was buoyed by increased government spending and favorable policies. However, recent developments indicate potential challenges ahead. According to a recent report, the U.S. defense sector is bracing for turbulence in 2025, as Goldman Sachs downgraded General Dynamics, citing risks tied to a slowing Pentagon budget and margin pressures. The defense budget, which has more than doubled over the past decade, could see deceleration under Trump’s newly formed Department of Government Efficiency.

Furthermore, Morgan Stanley has highlighted that while the Republican party’s win in the 2024 elections could pave the way for significant policy changes, concerns over trade tariffs, immigration policies, and fiscal sustainability may constrain the broader economic outlook. Investors are advised to remain cautious as these factors could impact the defense sector’s future performance.

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