The massive aerial attack launched against Israel by Iran late Saturday night has boosted the share prices of Israeli defense companies. While the market rose moderately despite the successful interception of 99% of the missiles and drones, the share price of Israel's biggest publicly traded defense company, Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT), led the way, rising nearly 4%. Elbit closed on Nasdaq on Friday with a market cap of $8.8 billion, lower than at the start of the war in October.
Other major rises were recorded by Aerodrome Group (TASE: ARDM), which collects and processing information using drones, and which rose 6.07%, while NextVision Stabilized Systems (TASE: NXSN), which develops stabilized cameras for ground and aerial vehicles, rose 5.27%, and Aryt Industries (TASE: ARYT), which develops, manufactures, and markets electronic fuses, rose 3%.
"Demand for defense production from Israel"
Elbit Systems CEO Bezhalel Machlis told an investor conference several weeks ago that the global environment supported the continued growth of the company's business, and he cited tension between the US and China that affects China's neighbors, the war in Ukraine that means increased defense budgets in Europe, as well as the "Iranian angle, including the war with us."
Elbit ended 2023 with a significant rise in its order backlog to $17.8 billion and revenue up 8.4% to $6 billion (revenue from Israel was 26.9% of total revenue in the fourth quarter, up from 18% in the corresponding quarter of 2022).
Sigma Investment House CEO Yair Shani told "Globes," "The story of the defense stocks is quite simple. There was very significant proof yesterday of the technological capabilities of the State of Israel, behind which are the defense companies, not all of which are publicly traded, but some are. There is no doubt that there will be very large demand for defense products from Israel."
Shani expects a major boom in the sector. He stressed, "Countries to which we want to supply defense technology will now be eager to buy, after seeing how the country is protected. This is the best sales promotion. Iran has done excellent sales promotion for Israel's arms companies. This will give a very big boost to the industry, of course focusing mainly on defense."
Published by Globes, Israel business news - en.globes.co.il - on April 14, 2024.
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