These US Defense Stocks Could Be Relatively Insulated Against Tariffs, Morgan Stanley Says
Key Takeaways
U.S. defense contractors like Lockheed Martin (
LMT
) and Northrop Grumman (
NOC
) could be relatively insulated from the
impacts of the Trump administration’s new tariffs
, Morgan Stanley analysts said Friday.
Supply chains
for many defense companies have historically been based in the U.S. for national security reasons, the analysts said. Firms that work primarily with the U.S. government also face less pressure from
retaliatory tariffs
imposed by other countries, they added.
Morgan Stanley named Lockheed and Northrop, along with L3Harris (
LHX
), as examples of defense companies that could be well-positioned to weather the new tariff environment. Conversely, the analysts said they expect defense companies with greater exposure to commercial clients like General Dynamics (
GD
) and Textron (
TXT
) to feel more pressure.
Shares of Lockheed and Northrop each fell about 4% in Friday afternoon trading, while L3Harris slid close to 3% amid a broad-based decline. General Dynamics and Textron shares dropped more than 6% and 7%, respectively. (Read
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