European defense stocks moved higher on Thursday after several major contractors reported strong first-half results. Dassault Aviation led the gains, with its shares jumping as much as 10% after the company posted a 46% YoY increase in adjusted net sales to €4.2 billion.
Thales and Indra Group also advanced around 5% after releasing solid earnings. Thales reported nearly 8% revenue growth, while order intake climbed 22% as demand remained strong for air defense systems, military radar, and secure battlefield communications. The company’s operating profit also came in above analyst expectations.
The sector continues to benefit from a sharp increase in defense spending across Europe. NATO members are raising military budgets to meet alliance targets and strengthen defense capabilities as governments respond to ongoing security challenges.
Analysts also highlighted strong cash generation across the sector, supported by large advance payments on defense contracts. As order books continue to expand, investors are increasingly focused on whether manufacturers can ramp up production quickly enough to meet growing demand.
