Elbit Systems Ltd. (ESLT) Looking set to Rise

The importance of defence related companies has increased manifold in the wake of growing geopolitical frictions across the globe. The increased military spending in the wake of the Russian-Ukraine war caused a decline in the general market performance on one hand, but on the other, it has benefited defence stocks. One such stock is Elbit Systems Ltd. (NASDAQ: ESLT). ESLT is a company known for serving the aerospace defence industry as well as the commercial aerospace industry. The company is headquartered in Israel. Since the geopolitical tensions don’t appear to be slowing down, this ultimately means that investment in defence stocks like ESLT won’t be a bad idea.

Recent Development for ESLT

Recently, Elbit Systems announced that it was awarded an aggregate value of $130 million for the delivery of artillery munitions production line. The product line would be delivered to an unnamed country in the Asia-Pacific region. The contract had a lifespan of 2.5 years, meaning that it was to be completed over 2.5 years. As per the contact, ESLT was to build a turnkey industrial complex to upgrade the manufacturing of munitions.

ESLT Current Valuation

Elbit Systems has a market capitalization of $9.75 billion, while the average daily trading volume of ESLT stock stands at 41,761 shares. The P/E ratio of 35.62% suggests that the stock price has grown exceptionally as compared to earnings. The beta value of 0.79 suggests that ESLT stock doesn’t experience much fluctuation; rather, it mostly remains on a stable course. The dividend providence of the company is insignificant, with a nominal dividend yield of 0.77%. The debt to equity ratio of 0.35 depicts that the company’s debt figures are minimal as compared to its equity.

Final Remarks

COVID-19 pandemic had some serious ramifications for the defence related companies, including Elbit Systems. However, signs are suggesting that the industry has come out of hat bearish spell. For ESLT, the current valuation looks excellent as all the indicators are pointing in a positive direction. Therefore, ESLT stock is expected to make some headwinds in near future. Investors should take careful decisions to gain hefty returns.


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