One of the country’s “Big Three” credit rating agencies has bolstered its view of the government contracting sector’s prospects under incoming President Donald Trump and in particular defense companies.
Fitch Ratings said in its latest assessment this week that defense contractors could also gain an increased footprint in the Department of Homeland Security under the assumption that border protection will be a priority for Trump’s administration.
The Navy will be one beneficiary, Fitch says, in light of Trump’s pledge to increase the U.S.’ warship fleet with cybersecurity another area to garner heightened attention under the next administration.
Along with stalwarts Moody’s and Standard & Poors, Fitch is one of three national credit rating organizations with an official SEC designation as such and a neutral arbiter financial professionals look to for an external and independent perspective on markets.
One area Fitch recommends observers keep a close eye on is trade policies under a Trump administration as many large U.S. primes have prioritized international military sales as a means to offset flat or declining domestic defense budgets.
Fitch issued its newest evaluation of defense in a time that has seen investors key on military’s largest weapon and platform makers as companies that stand to benefit over the next four years.
As we noted last week, noted investment website Motley Fool termed the four-day post-election surge in defense stocks as a “Trump Effect” for the short term.
Now with Fitch’s backing, defense also looks to be a winning play in the long game.
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