Defense Stocks Reach Record Valuations Amid Market Rebound

Defense sector valuations have surged to unprecedented levels, compounding concerns about overpriced equities. After a brief correction last year, major contractors like Lockheed Martin and Raytheon now trade at enterprise-value-to-sales multiples exceeding historical norms.

Analysis of 20-year EV/S data reveals a structural shift in pricing. Where defense firms once traded at 1x sales during the early 2000s, current multiples reflect nearly a decade of steady expansion. The sector's resilience during recent market volatility has only intensified this trend.

Investors face a paradox: while geopolitical tensions support defense spending, current valuations leave minimal margin for error. The sector's risk-reward profile now mirrors speculative tech stocks more than traditional industrial plays.