Top National Security Investor: Missile Production Is About to Explode as U.S. Rebuilds Arsenal
Top National Security Investor: Missile Production Is About to Explode as U.S. Rebuilds Arsenal
Thomas RichmondWed, June 24, 2026 at 10:37 PM UTC
0
Vadim Tolbatov / Wikimedia CommonsQuick Read -
Bancroft picks HON for navigation dominance in 11 of 12 top U.S. weapons and LHX for its Axyv missile unit pursuing a $2B IPO.
Albany International's composites for the F-35 and LEAP engines drove a 40% YTD rally, but three analyst Hold ratings and a $59 target signal caution.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Honeywell didn't make the cut. Grab the names FREE today.
Tony Bancroft, portfolio manager at Gabelli Funds and head of the firm's commercial aerospace and defense ETF, argued in a recent CNBC segment that U.S. missile and aircraft production is on the cusp of a multi-year trend. His thesis rests on two pillars: immediate replenishment of arsenals depleted in recent conflict, and longer-term rearmament against threats such as China and Russia.
Bancroft says structural supply constraints will drive sustained production increases, pointing to framework agreements discussed by the Trump Administration that could triple or quadruple missile production over the coming years. He cites roughly 1,000 Patriot interceptors expended out of an inventory of about 5,000 as evidence that the replenishment cycle alone will run for years before any push toward a 600-ship naval fleet goal is layered on top.
Honeywell: The Navigation Backbone Behind the Spin-Off
Honeywell (NASDAQ:HON) was one of Bancroft's large-cap picks. He says 11 of the 12 "exquisite" U.S. weapons systems rely on Honeywell content, particularly ring laser gyros and navigation hardware. The upcoming separation of Honeywell's aerospace business is a central catalyst in his view, creating a pure-play defense and aerospace vehicle for investors.
Honeywell's Q1 FY2026 results delivered adjusted EPS of $2.45 against a $2.32 consensus, and Aerospace Technologies posted $4.322B in revenue with a 1.1x book-to-bill. Q4 '25 Defense and Space sales rose 10% on "sustained elevated global demand." Shares are up 15.18% year to date to $222.37, with an analyst target of $246.67 and a forward P/E of 22.
HON Earnings Quotes — 24/7 Wall St.
L3Harris: The Pure-Play Missile Bet
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Honeywell didn't make the cut. Grab the names FREE today.
Advertisement
Bancroft highlighted L3Harris Technologies' (NYSE:LHX) planned spin-off or IPO of a portion of the business's missile-solutions business, anchored by Aerojet Rocketdyne, in the second half of the year. The unit, branded Axyv, has tapped JPMorgan Chase and Morgan Stanley to lead an IPO that could raise up to $2 billion, with $1 billion in Pentagon funding already secured.
Q1 FY2026 Missile Solutions revenue hit $990M, up 18% YoY, on higher production volumes across programs prioritized by the Munitions Acceleration Council. Backlog reached a record $40.7B, and the company raised its FY26 GAAP EPS guidance to $11.40-$11.60. The stock trades at $294.23, essentially flat year-to-date, with a Street target of $381.95 and a forward P/E of 25.
LHX Analyst Ratings — 24/7 Wall St.
Albany International: The Small-Cap Composite Angle
Albany International (NYSE:AIN) was a small-cap pick on Bancroft's list. He points to Albany's aerospace fan-blade and advanced composite technology as a leveraged smaller-cap play on rising military and commercial aircraft build rates. The Albany Engineered Composites unit supplies content for LEAP engines, the CH-53K heavy-lift helicopter, the F-35, and the 787.
Shares trade at $70.72, up 40.17% year to date, against a market cap of roughly $2.01 billion. Analyst coverage is thin, with a $58.67 consensus target and three Hold ratings, suggesting the rally has run ahead of sell-side models even as the production-ramp story plays out.
What to Watch
Bancroft believes that recent conflicts have exposed how quickly modern militaries can burn through precision munitions, making a prolonged production ramp more likely regardless of short-term geopolitical headlines. Investors who agree with that view should watch whether today's framework agreements translate into multi-year contracts, while keeping an eye on catalysts like Honeywell's aerospace separation and L3Harris' planned Axyv IPO. Defense stocks will remain volatile as geopolitical tensions ebb and flow, but the underlying production cycle could play out over many years.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Honeywell didn't make the cut. Grab the names FREE today.
Source: “AOL Money”
