A number of market analysts feel that this run in the aerospace and defense sector could continue even after the extended bull market continues to lose steam and delve into a full-blown correction. According to MarketWatch investing columnist Philip Van Doorn, “stock prices tend to be driven by increases in earnings. The federal income tax cuts that went into effect this year will no doubt boost profits and potentially share prices. But that party will surely end, after which it is reasonable to expect the aerospace and defense subsector to continue to outperform the broader market.”

Even amid geopolitical tensions brewing in Saudi Arabia, some analysts are predicting that it will be nothing short of a mere blip on the radar screen for defense stocks.

“The Saudi Arabia situation does not affect the overall picture in a way that materially changes U.S. defense stock fundamentals,” said Carter Copeland, founding partner at Melius Research.

“Defense stocks already trade at high multiples because of macro fears elsewhere and the ongoing complexity of the geopolitical threat environment,” Copeland added.

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