'If you want peace, rearm Europe' - Jefferies picks top defence names
13/03/2025 08:35
** Jefferies starts coverage of five European defence companies amidst increased rush in the continent to invest more in defence and decouple from U.S. military assistance
** Starts Germany's Rheinmetall RHMG.DE with "buy" and names it its top pick citing its strongest growth potential owing to its short-cycle focus at an attractive price
** Sees similar trends for RENK R3NK.DE (initiation at "buy")
** Starts Italy's Leonardo LDOF.MI with "buy" saying it's a key player in a country where defence budgets are set to accelerate strongly
** Initiates Dassault Aviation AM.PA with "buy" saying it should benefit from Rafale ramp up and R&D ramp down
** Values Babcock BAB.L ("buy") for its ability to deliver military capabilities at an affordable price
** The brokerage downgrades Thales TCFP.PA to "hold" as it sees it has now rerated too quickly given its longer-cycle nature
** Names Hensoldt HAGG.DE (initiation at "underperform") its least preferred stock as it is the most expensive and as the European SkyShield Iniative, a key driver for its shares, is heavily reliant on U.S. systems
| COMPANY | RATING | OLD RATING | PT | OLD PT |
|---|---|---|---|---|
| Dassault Aviation | Buy | 350 euros | ||
| Renk | Buy | 44 euros | ||
| Rheinmetall | Buy | 1,540 euros | ||
| Hensoldt | Underperform | 55 euros | ||
| Leonardo | Buy | 52 euros | ||
| Babcock International | Buy | 900 pounds | 770 pounds | |
| Bae Systems | Hold | 1,540 pounds | 1,360 pounds | |
| Thales | Hold | Buy | 240 euros | 190 euros |
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