The defense industry has experienced remarkable growth since 2022, with the market expecting this trend to continue in the future. A comprehensive analysis by Placera reveals that Kongsberg is currently the most highly valued company in the defense sector. The Norwegian company is valued at EV/Ebit 28.6 for next year’s expected earnings. So far this year, the stock has surged a massive 169% and is currently trading at a P/E of 35.7x for 2025’s expected earnings. It is worth noting that Kongsberg also has the highest valuation in terms of EV/Sales for next year.
Among the companies that Placera has examined closely, French company Dassault Aviation has the lowest valuation for next year, with an EV/Ebit of 10.2x. The stock is up 4% this year. Saab has seen a 74% increase in its stock price this year and is valued at EV/Ebit 18.9x for 2025.
How Defense Companies are Valued
Companies are ranked from lowest to highest valuation according to EV/Ebit 2025E.
| Company | 1-Year Return (%) | P/E 2025E | EV/Ebit 2025E | EV/Sales 2025E | Ebit Margin 2025E (%) | Annual Growth 2025E-2026E (%) |
|——————-|——————-|———–|—————|—————-|———————-|——————————|
| Dassault Aviation | 4% | 13.5x | 10.2x | 0.9x | 9.3% | 21.6% |
| Leonardo | 73% | 14.7x | 12.2x | 1.1x | 8.6% | 5.8% |
| Thales | 8% | 16.1x | 13.6x | 1.7x | 12.4% | 6.6% |
| BAE Systems | 23% | 17.1x | 14.4x | 1.6x | 11.0% | 7.2% |
| Rheinmetall | 108% | 20.0x | 14.6x | 2.3x | 15.9% | 24.7% |
| Lockheed Martin | 19% | 19.1x | 16.6x | 2.0x | 11.8% | 3.8% |
| RTX | 52% | 19.4x | 18.1x | 2.4x | 13.0% | 6.0% |
| Northrop Grumman | 4% | 17.5x | 18.6x | 2.1x | 11.0% | 4.0% |
| Saab | 74% | 24.4x | 18.9x | 1.9x | 9.8% | 15.4% |
| Boeing | -33% | 115.4x | 28.3x | 1.6x | 5.6% | 19.5% |
| Kongsberg | 169% | 35.7x | 28.6x | 3.9x | 13.7% | 13.9% |
| Average | 46% | 28.5x | 17.7x | 1.9x | 11.1% | 11.7% |
Source: Factset
It is evident from the data that the defense industry is experiencing significant growth and investor interest. The market is bullish on companies like Kongsberg, which has shown exceptional performance and is highly valued in the sector. As geopolitical tensions rise, the demand for defense products and services is expected to increase, driving further growth in this industry.