Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Friday, Jefferies maintained a Hold rating on Elbit Systems (NASDAQ:ESLT) and increased the price target to $450 from $435. The firm’s analyst, Sheila Kahyaoglu, cited the company’s strong performance in the first quarter, with a 22% organic growth and a 90 basis points adjusted EBIT margin expansion. This performance has contributed to the company’s impressive 93.61% return over the past year, with InvestingPro data showing the stock currently trading at a P/E ratio of 47.28x.
Elbit Systems demonstrated a significant increase in revenue, particularly in its Land segment, which saw a 36% growth following a 48% rise in the first quarter. Kahyaoglu noted that this surge is tied to operational leverage and productivity in Elbit Systems of America (ESA), which experienced a margin increase of 350 basis points to 7%. According to InvestingPro analysis, the company has maintained consistent dividend payments for 29 consecutive years, demonstrating strong financial stability. The company’s beta of -0.35 indicates it often moves inversely to the broader market, potentially offering portfolio diversification benefits.
The analyst expects that sustained international demand, fueled by a rise in global defense spending — with NATO contributing an additional $280 billion annually — will support a projected 10% revenue increase and a 90 basis points margin improvement by 2026. This outlook is based on the assumption that Elbit Systems will continue to benefit from its operational efficiency and market position.
Kahyaoglu’s valuation of Elbit Systems aligns with high-growth industry peers, applying a 33 times forward-year two price-to-earnings multiple. The revised price target of $450 reflects this assessment and the company’s robust financial performance.
Investors and market watchers will be observing how Elbit Systems capitalizes on the expanding defense sector and maintains its growth trajectory in line with Jefferies’ projections.
In other recent news, Elbit Systems reported impressive financial results for the first quarter of 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $2.57, exceeding the forecast of $2.08, and reported revenue of $1.896 billion, outperforming the anticipated $1.69 billion. This marks the fourth consecutive quarter of double-digit revenue growth for Elbit Systems, driven by strong demand in the Land and Aerospace segments. The company’s backlog also reached a record $23.1 billion, a 40% increase from the previous year. Analysts from Oppenheimer noted the robust performance in the Land division, which saw a 48% increase in revenue. Elbit Systems continues to see strong interest in its IronBeam laser defense system, expected to be operational by the end of 2025. The company plans to increase capital expenditures to around $250 million, focusing on advancing its defense solutions. CEO Botsi Mutlis expressed optimism about the future, highlighting ongoing demand for defense investments.
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