JPMorgan Says Buy Dip in Defense Stocks After Trump Comments

This week’s decline in Europe’s defense shares presents an opportunity to add to holdings in the still-buoyant sector, according to JPMorgan Chase & Co.

Germany’s Rheinmetall AG, was down 5.6% over the three sessions. (Photo: Rheinmetall X)

Analyst David Perry made the recommendation after shares slipped following President Donald Trump’s recent speech at the World Economic Forum in Davos, Switzerland, Isolde MacDonough and Joe Easton reported for Bloomberg News.

Trump said he did not want to use excessive force to take control of Greenland, which is currently owned by Denmark.

In what some analysts viewed as a de-escalation of tensions, Trump later said a “framework” had been formed on the future of Greenland following a meeting with North Atlantic Treaty Organization (NATO) Secretary General Mark Rutte. NATO, however, said no such framework had been agreed upon.

A Goldman Sachs Group Inc. basket of the region’s defense stocks fell as much as 3.0% on Thursday, marking a third straight day of declines. One of the largest firms, Germany’s Rheinmetall AG, was down 5.6% over the three sessions.

“We continue to recommend that investors buy any weakness in European defense stocks,” Perry said. “We are in the very early stages of a global defense spending upturn that could last for another decade.”