Fluctuations in the defense sector: Preferred choices of analysts between Rheinmetall and Hensoldt revealed

Defense stocks are gearing up for a resurgence in the third quarter, according to industry analysts. One standout company, Rheinmetall, remains a favourite among investors due to its strong portfolio and leading position in terms of capacities and technology.

However, the landscape is not without challenges. A potential Initial Public Offering (IPO) from European defense group KNDS could pose political risks for Rheinmetall. KNDS, formed by the merger of Krauss-Maffei Wegmann and Nexter Systems, is expected to have around 10,000 employees and revenue of approximately 3.8 billion euros by 2024. With a higher current valuation, Hensoldt may be particularly affected by any capital outflows resulting from a KNDS IPO.

The recent meeting between Donald Trump and Volodymyr Zelensky, along with other European representatives, has put pressure on Rheinmetall stock. Despite this, analyst David Perry of the US bank JPMorgan has noted that the encounter was "much friendlier" than the February meeting. Perry continues to rate Hensoldt stock as "Sell" with a price target of 70.00 euros.

MWB Research, on the other hand, remains optimistic for Rheinmetall and confirms its "Buy" rating with a price target of 2.280 euros. The European Defence Index offers a bundle of promising defense stocks for investment, including Rheinmetall.

It's important to note that short-term fluctuations in stock prices are possible, but the defense industry remains an attractive long-term investment prospect. Interested investors can find more information about the European Defence Index here.

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Fluctuations in the defense sector: Preferred choices of analysts between Rheinmetall and Hensoldt revealed