European defence stocks slip after record run

RENK AG

20/03/2025 12:07

** Shares in European defence companies slip on Thursday, with an analyst pointing to profit taking after their record-breaking run

** Europe's aerospace and defence index .SXPARO is set for its biggest daily drop in 2 years, down 2.8% at 1155 GMT after hitting a fresh record high on Wednesday

    ** The index added some 8% since European leaders agreed they must spend more on defence; it is up 33% YTD

** "Following the sharp rise in share prices triggered by the news flow surrounding the German financial package for defense, speculative investors are now taking profits: sell on good news. Such a correction was overdue," LBBW analyst Stefan Maichl says

** Still, Maichl notes the companies are likely to remain an attractive medium to long-term investment due to the emerging strong growth prospects

** "The decisive factor now is what budget target NATO agrees on at the summit in den Haag in June," he adds

** Germany's Hensoldt HAGG.DE, Rheinmetall RHMG.DE, Renk R3NK.DE are leading losses, all falling between 5.6% and 6.3%

** France's Dassault Aviation AM.PA, Italy's Leonardo LDOF.MI fall around 4%

** Britain's BAE Systems BAES.L slides 2.8%

 (Reporting by Bernadette Hogg and Marleen Kaesebier)

 ((Marleen.kaesebier@thomsonreuters.com))