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Crisis in the Caribbean: The Defense Sector Playbook

Investing.com Logo Investing.com By Jeffrey Neal Johnson
Crisis in the Caribbean: The Defense Sector Playbook

Following U.S. military operations in Venezuela after the collapse of the Argyle Accords, the aerospace and defense sector is experiencing strategic rotation. Rather than broad defense stock purchases, investors should focus on companies addressing critical needs: ammunition replenishment and regional border security. RTX Corp and L3Harris benefit from depleted global inventories and pricing power, while Embraer capitalizes on Brazil's border security operations. Supply chain constraints in titanium and other materials remain a key risk.

Insights
RTX   positive

Record $225 billion backlog, removed DOJ regulatory overhang, strong pricing power due to global inventory depletion in Eastern Europe and Middle East, inelastic demand ensures revenue visibility through end of decade