U.S. defense stocks surged in premarket trading Monday following a Wall Street Journal report outlining the Pentagon’s ambitious plan to boost missile production, aimed at preparing for potential conflicts with China.
The WSJ reported that military officials are pushing contractors to double or even quadruple production across 12 key weapons systems, including Patriot interceptors, Long Range Anti-Ship Missiles, Standard Missile-6, and Precision Strike Missiles.
Deputy Defense Secretary Steve Feinberg is reportedly taking a hands-on role through the Pentagon’s new Munitions Acceleration Council, conducting weekly calls with executives to track progress, according to the WSJ.
Defense stocks reacted positively: RTX (NYSE:RTX) climbed 2.5%, Lockheed Martin (NYSE:LMT) rose 2.3%, Northrop Grumman (NYSE:NOC) added 0.9%, Boeing (NYSE:BA) gained 1.6%, and L3 Harris (NYSE:LHX) increased 1% in early trading.
The initiative comes amid concerns over dwindling missile inventories after Russia’s war in Ukraine and the recent Israel-Iran conflict, which prompted the U.S. to deploy hundreds of advanced interceptors.
The Pentagon reportedly aims to secure capacity for nearly 2,000 PAC-3 missiles from fiscal years 2024 to 2026 — nearly four times the current production rate, the WSJ said.
Defense contractors have already started scaling operations. Boeing recently completed a 35,000-square-foot expansion for Patriot seeker production, while Northrop Grumman has invested over $1 billion to boost rocket motor output, according to the WSJ.
Still, some experts question whether the Pentagon’s ambitious targets can be achieved without significantly more funding.
Without additional money and contracts, some participants in the initiative told the WSJ that “the government’s targets aren’t realistic.”
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