Defense primes are doing what they were built to do: compound through political noise. With the FY2027 Department of War budget request landing at $1.45 trillion, a $440.9 billion or 44% increase from the FY 2026 enacted level, and NATO members committing to 5% of GDP on defense by 2035, the multi-year demand picture has rarely looked more locked in. Goldman Sachs Asset Management frames it bluntly: “Geopolitical tension is increasing along with new and emerging threat vectors” while economic security takes center stage in 2026 portfolios.
The sector is delivering on that backdrop. Each of the three U.S. primes below has reaffirmed or raised 2026 guidance, sits on a record or near-record backlog, and is positioned inside the Department of War’s new framework-agreement contracting model. Here are three resilient defense stocks worth a closer look in June.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT | LMT Price Prediction) trades around $496.61, with shares up 5% year to date and 10% over the past year. The forward multiple sits at roughly 17x, the dividend yields 3%, and the Wall Street consensus target is $625.16.
The bull case rests on backlog and contracting reform. Lockheed closed 2025 with a record $194 billion backlog, more than 2.5 years of sales, and CEO Jim Taiclet pointed to a “landmark, seven-year framework agreement for PAC-3 missiles” as the template. Taiclet said the new framework deals across Patriot, THAAD, and PrSM “will in turn support strategic investments in production infrastructure… to increase production rates of these critical systems by 3-4 times current rates.” Management reaffirmed FY2026 EPS guidance of $29.35 to $30.25 and free cash flow of $6.50 billion to $6.80 billion. The company also delivered its 23rd consecutive year of dividend increases.
The caveat: Q1 2026 was bumpy. EPS of $6.44 missed the $6.70 consensus, segment margins compressed from 12% to 10%, and a $125 million unfavorable F-16 adjustment reminded investors that fixed-price contract exposure cuts both ways. Free cash flow was negative $291 million in the quarter.
Northrop Grumman (NOC)
Northrop Grumman (NYSE:NOC) is the contrarian pick of the trio. Shares trade near $508.19 and are down 9% year to date, creating a setup where the trailing P/E of about 16x looks compelling against an analyst consensus target of $696.95. The dividend yields 2%.
Q1 2026 was the inflection. Adjusted EPS of $6.14 beat the $6.06 estimate, revenue rose 4% to $9.88 billion, and Aeronautics Systems swung from a $183 million operating loss to $305 million in operating income as the prior-year B-21 charge rolled off. Mission Systems margin expanded to 15% from 13%, net income jumped 82% year over year, and the backlog stood at $95.6 billion. CEO Kathy Warden flagged “robust bookings, mid-single-digit organic sales growth.” Management reaffirmed FY2026 sales of $43.5 billion to $44.0 billion and MTM-adjusted EPS of $27.40 to $27.90. The B-21 Raider production ramp and the Sentinel ICBM program represent multi-decade revenue streams that no future administration will unwind.
The caveat: Q1 free cash flow was negative $1.82 billion, and a $71 million unfavorable EAC adjustment on the GEM 63XL rocket motor after a launch anomaly is a reminder of program-execution risk. Space Systems revenue fell 3% on the NGI wind-down.
RTX (RTX)
RTX (NYSE:RTX) is the momentum name. Shares trade at $185.55, up 30% over the past year, with a forward P/E near 26x, a dividend yield of 1%, and a consensus target of $215.73.
Q1 2026 was the fourth consecutive EPS beat. Adjusted EPS of $1.78 beat the $1.52 consensus, revenue rose 9% to $22.08 billion, and free cash flow expanded 65% year over year to $1.31 billion. Raytheon adjusted operating profit jumped 25% on Patriot and naval munitions demand. CEO Chris Calio said RTX is “increasing adjusted sales and EPS in our full year outlook” citing “the strength we’re seeing in our defense business.” The raised 2026 outlook calls for adjusted sales of $92.5 billion to $93.5 billion and EPS of $6.70 to $6.90, with backlog at $271 billion ($162 billion commercial, $109 billion defense), the largest of the three primes.
The caveat: the Pratt & Whitney powder metal matter still requires accelerated GTF fleet inspections, and tariff headwinds plus pending DOJ deferred prosecution agreements and SEC investigations remain unresolved overhangs. At 34x trailing earnings, the multiple leaves little room for execution stumbles.
What to Watch Next
The catalyst path through the back half of 2026 runs through framework-agreement awards, FY2027 budget appropriations, and continued allied procurement. With the FY 2027 procurement line set to rise to $257.591 billion versus $163.626 billion enacted for FY 2026, the multi-year demand signal that anchors all three theses is strengthening. If global defense spending stays at multi-decade highs, the resilience descriptor earns its keep.
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