Zacks Equity Research has spotlighted three major aerospace and defense companies as strong buys, citing powerful industry tailwinds heading into the back half of 2026.
The firms identified are GE Aerospace (GE), RTX Corp. (RTX), and General Dynamics (GD), all of which carry a Zacks Rank #2 (Buy) rating.
The Zacks Aerospace-Defense industry continues to benefit from rising global defense budgets, military modernization programs, and escalating geopolitical tensions driving demand for advanced procurement contracts.
The U.S. Department of War unveiled President Trump’s proposed fiscal 2027 defense budget in April 2026, seeking a record $1.5 trillion in funding, approximately 42% higher than current levels.
The proposal allocates more than $756.8 billion toward new military capabilities, signaling continued investment in next-generation defense technologies and expansion of the domestic defense industrial base.
On the commercial aviation side, the International Air Transport Association projects global air passenger demand to more than double by 2050, at a compound annual growth rate of 3.1%, reaching 20.8 trillion Revenue Passenger Kilometers.
Despite those long-term tailwinds, the industry faces persistent headwinds including supply-chain disruptions, labor shortages, and component constraints that continue to delay aircraft production and slow fleet modernization efforts.
The Zacks Aerospace-Defense industry currently carries a Zacks Industry Rank of #105, placing it in the top 43% of more than 246 Zacks industries, reflecting a broadly positive near-term outlook.
The industry has underperformed the broader market over the past year, with stocks collectively gaining 4.5% compared to the Zacks S&P 500 composite’s 23.2% rise during the same period.
On a valuation basis, the industry trades at a trailing 12-month EV/Sales ratio of 2.91X, well below the S&P 500’s 5.87X, suggesting relative value remains on the table for investors.
GE Aerospace, headquartered in Evendale, OH, is a leading designer, developer, and producer of jet engines and integrated systems for military, commercial, and business aircraft across global markets.
In June 2026, GE Aerospace and Wolfspeed signed a memorandum of understanding to accelerate the adoption of high-voltage silicon carbide technology for aerospace, defense, and industrial electrification applications.
The Zacks Consensus Estimate for GE’s 2026 sales calls for an increase of 15.2% year over year, while 2026 earnings per share are projected to improve by 17.4% over the same period.
RTX Corp. (RTX), based in Waltham, MA, provides advanced aerospace and defense systems and services to commercial, military, and government customers around the world.
In July 2026, RTX’s Raytheon and NATO launched feasibility studies to expand AMRAAM missile production in Europe by qualifying additional regional suppliers and increasing manufacturing capacity to meet allied demand.
The Zacks Consensus Estimate for RTX’s 2026 sales points to a 6% year-over-year increase, with 2026 EPS expected to rise 9.9% compared to the prior year.
General Dynamics (GD), headquartered in Falls Church, VA, operates across information systems, combat vehicles, shipbuilding, munitions, and business aviation segments serving government and commercial clients.
At the end of the first quarter of 2026, General Dynamics reported a solid backlog of $130.84 billion, with total estimated contract value reaching $188.44 billion when combining backlog with potential contract value.
The Zacks Consensus Estimate for GD’s 2026 sales projects a 4.7% improvement year over year, with 2026 EPS forecast to increase 7.3% compared to the previous year.
Across all three names, analysts see durable earnings growth supported by long-term procurement programs, expanding NATO demand, and a domestic defense industrial base entering a sustained period of investment.
