Morningstar: The EU-US trade agreement is not necessarily negative for European defense companies.

Loredana Muharremi, a stock analyst at Morningstar, stated that the EU-US trade agreement is not necessarily negative for European defense companies, but it does confirm that the US will continue to play an important role in the European defense ecosystem in the future. This trend was already expected as Europe still has some capability gaps in areas such as missiles and has an urgent need for ready-made equipment. In the mid-term, if Europe can gradually fill these capability gaps, the proportion of equipment purchased from the US should decrease. Currently, European defense stocks have entered a stable period as the previous anticipated growth has been largely reflected in stock prices. Whether stock prices can further rise in the future will depend on the specific allocation of new defense spending and how high-deficit countries implement their expenditure plans.