FRANKFURT (dpa-AFX) - In view of the tense global security situation, some defense stocks reached new record highs on Wednesday. Rheinmetall shares, meanwhile, remained just below the 520 euros reached the day before after their 81 percent gain for the year to date. Meanwhile, the shares of electronics specialist Hensoldt narrowed the gap and extended their annual gain to around 79 percent. The shares of tank supplier Renk have meanwhile brought investors a gain of 138 percent since the stock market flotation in February.

In an industry study, analyst David Perry from JPMorgan focused on the rearmament cycle in Europe - triggered by Russia's war of aggression against Ukraine in February 2022. According to the expert, this wave of demand will last for at least a decade. He sees a growing political consensus in Europe that higher defense spending is urgently needed. This is also because we want and need to become less dependent on support from the USA. According to Perry, the corresponding incoming orders still justify higher valuations in the industry.

In the short term, he highlights the engineering services provider Babcock International as particularly interesting in view of the upcoming annual results. Its shares, which have only just returned to the level they have been at since 2020, also have catch-up potential in the chart picture. Perry's profit forecasts for Babcock up to 2028 are clearly above the market consensus./ag/ajx/jha/