Israel-based defense firm Elbit Systems (ESLT) could benefit from reports which suggest that its products performed very well during Israel’s war with Iran. Multiple publications indicate that the reputation of Israeli weapons makers in general improved as a result of the war, and the latter development should also, of course, help Elbit going forward.
Also importantly, Elbit continues to sign impressive, new contracts, while signs are mounting that it is getting close to deploying its anti-missile laser system which could easily be a game changer for the firm.
Finally, the company should keep benefiting from the conflict-oriented geopolitical environment, and it seems that Wall Street is becoming excited about ESLT stock.
Given all of these points, growth investors who are looking for increased exposure to the defense sector should consider buying ESLT stock.
Reports on the Israel-Iran War
Globes, one of Israel’s best-known business-news publications, reported that “penetration bombs from Elbit System..performed impressively” during the Israel-Iran War. Additionally, The Jerusalem Post stated that Elbit’s Hermes 900 drone “really took control of the skies of Iran, and particularly of Tehran” during the war.
And the conflict provided “proof positive of the quality of Israel’s defense industry against a country backed by Russia and China,” wrote Dean Shmuel Elmas, a geopolitical analyst for Globes.
All of these developments should, going forward, make it easier for Elbit to make deals with many countries globally.
Impressive New Contracts and Progress on Laser Systems
Earlier this month, Elbit announced that it had obtained a deal worth about $60 million to supply Peru with its PULS (Precise and Universal Launching System) rocket artillery system. Since this is the first time that a Latin American company has ordered a PULS system from ESLT, the agreement could open a significant, new market for the company.
Similarly, the firm on May 28 disclosed that it had obtained about $330 million of naval contracts. The agreements highlight “the company’s growing role in strengthening naval defense capabilities for customers around the world.” In light of this statement, it looks like Elbit’s naval business is expanding fairly rapidly, providing it with another growth engine.
As I noted in my previous column on ESLT, Elbit has helped to develop Iron Beam, Israel’s laser anti-missile system. The firm has created a plane-based version of Iron Beam, which could prevent it from being stymied by unfavorable weather.
Additionally, I theorized that “there is likely to be significantly less competition for a plane-based missile defense system than for a land-based version of such an offering.” And given the fact that lasers are much cheaper than missiles, the demand for the plane-based version of Iron Beam should be quite high globally.
In any case, Israel may be close to fully deploying the Iron Beam, as the nation disclosed at the end of May that it had used “a prototype laser to intercept drones,” while multiple publication reported that the country had utilized Iron Beam for the first time in a combat situation during the war against Iran. Officially, the Iron Beam is supposed to be deployed by the end of 2025.
Geopolitical Turmoil and the Street’s Apparent Excitement
On June 3, S&P Global Ratings Maalot, an Israeli ratings agency, raised its long-term rating on ESLT to ilAA+ with a stable outlook on Elbit’s Series B,C, and D Notes, Elbit reported. Maalot wrote that “Elbit is posting strong operating performance with a record-high backlog due to escalating geopolitical conflicts leading to high demand for its products.”
With the Israel-Hamas war and the Ukraine-Russia War still ongoing, the demand for Elbit’s offerings should remain quite high for the near term at least. Additionally, the neighbors of Russia, Iran, and China all probably continue to fear those three nations’ potential territorial ambitions, so many of them are likely to spend large amounts of money on weapons going forward. All of these trends should help boost Elbit’s financial performance and ESLT stock for at least the near-to-medium term.
Speaking of Elbit’s stock, as of the morning of July 17, the shares had surged 66% in all of 2025 and 135% in the previous 12 months. As a result, I believe that the Street has become quite bullish on the name.
Providing additional evidence for this thesis, three huge banks significantly increased their holdings of ESLT stock in the first quarter of the year. Morgan Stanley raised its stake by 28% to 33.6 million shares, while Goldman Sachs increased its position by 34% to 135,100 shares, and Deutsche Bank’s stake soared 61.2% to 117,083. Overall, institutions purchased 773,339 shares of ESLT stock and sold just 354,334 units.
*This article is intended to be informational only; it is not financial advice.
