** Brokerage Barclays says defense cos valuations are "intriguing," and cuts PTs on major cos citing potential budget and DOGE risks
** President-elect Donald Trump, gearing up for his second term, announced the formation of the Department of Government Efficiency (DOGE), a proposed advisory commission to be led by businessmen Elon Musk and Vivek Ramaswamy
** Barclays cuts PTs of L3Harris Technologies LHX.N to $255 from $290, Lockheed Martin Corp LMT.N to $515 from $565 and General Dynamics GD.N to $305 from $330
** Shares of LMT and LHX down ~1% in early morning trading
** Brokerage says that without accelerated budget growth, the defense sector's potential may be unattainable
** "For 2025, we forecast aero EPS outgrowing at mid-to-high teens on average while defense EPS under-grows at HSD on average" - Barclays
** Brokerage, however, believes there's potential for profit margins to improve after they've been negatively affected in recent years by inflation and an "unfavorable mix"
** In 2024, LMT gained ~7% and GD rose ~2%, while LHX was down ~0.2%
(Reporting by Rupali Chaudhary in Bengaluru)
((Rupali.Chaudhary@thomsonreuters.com))
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.