Defense stocks fall across the board on ‘Q3 earnings concerns’ [Stock NOW]

[Financial News] Defense stocks are falling across the board in early trading. The decline appears to reflect growing market concerns ahead of third- and fourth-quarter earnings announcements.
According to the Korea Exchange, as of 9:18 a.m. on the 19th, Hanwha Aerospace was trading at 856,000 won, down 3.60% from the previous trading day. Other defense stocks were also falling across the board, including Hanwha Ocean (-5.46%), LIG Defense & Aerospace (-3.14%), Korea Aerospace Industries (-1.11%), Hyundai Rotem (-3.82%) and Hanwha Systems (-5.44%).
The market is cautious ahead of Hyundai Rotem’s third- and fourth-quarter earnings announcement this afternoon. This follows recent price target cuts by securities analysts, who expect all major defense stocks to fall short of third- and fourth-quarter market consensus estimates.
Yang Seung-yoon, an analyst at Eugene Investment & Securities who lowered his price targets for Hanwha Aerospace, LIG Defense & Aerospace, Hyundai Rotem, Korea Aerospace Industries (KAI) and Hanwha Systems on the 16th, explained: “Third- and fourth-quarter earnings for the defense stocks we cover are expected to broadly fall short of expectations. The lower won-dollar exchange rate has reduced export profitability, compounded by delayed revenue recognition for export volumes and development spending concentrated in the second half.”
Still, the view is that the stocks have already fallen far enough. Yang added: “I believe concerns and risks surrounding the defense sector are already largely reflected in share prices. Demand for weapons remains solid, but fiscal constraints are also clear. The answer is expanding overseas and localizing.”

[email protected] Lim Sang-hyeok Reporter