3 Resilient Defense Stocks to Buy in July

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Defense stocks are the rare corner of the market where geopolitical anxiety, fiscal generosity and multi-year revenue visibility all converge at once. With the Fiscal Year 2027 investment request by the Department of War totaling $756.8 billion, and President Trump declaring that “our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” the demand backdrop heading into July is as durable as it gets. Goldman Sachs frames it similarly, arguing that economic security will be a prominent theme in 2026, with NATO defense commitments and reindustrialization creating substantial opportunities for active managers.

Three names anchor that thesis. Each has a tool-verified data point supporting the “resilient” label, each has a clear bull case for July, and each carries a real risk worth pricing in.

Lockheed Martin (NYSE: LMT)

Lockheed Martin (NYSE:LMT) trades at $545.70 as of July 2, up nearly 8% over the past month. The stock is up around 10% over the trailing year, but some recent weakness has created a more interesting entry. Forward P/E sits at 17, with a dividend yield of 3% and a Wall Street average target of $624.11.

The bull case is built on backlog and program lock-in. Lockheed ended 2025 with a record $194 billion backlog, representing more than 2.5 years of sales, and management reaffirmed FY2026 guidance of $77.5 to $80.0 billion in sales and diluted EPS of $29.35 to $30.25. Critically, the Department of War signed multi-year framework agreements to scale Patriot, THAAD, and PrSM production by three to four times current rates, and Lockheed just landed a $4.8 billion PAC-3 missile production contract. CEO Jim Taiclet said the year’s start “reinforces our confidence in Lockheed Martin’s continued operational and financial growth in the year ahead.”

Risk: Q1 2026 EPS of $6.44 missed the $6.70 estimate, dragged by a $125 million F-16 unfavorable profit adjustment. Fixed-price contract execution remains the perennial caveat.

Northrop Grumman (NYSE: NOC)

Northrop Grumman (NYSE:NOC) has been the worst-performing of the three this year, down 12% year-to-date to $504.60. That underperformance is the opportunity. Forward P/E sits at 18, the dividend yields 2%, and the analyst target of $695.05 implies meaningful upside from current levels.

The resilience case is the cleanest of the group. Q1 2026 saw EPS of $6.14 beat the $6.06 estimate, revenue grew 4% to $9.88 billion, and net income climbed 82% year-over-year. The B-21 Raider swung from a $183 million operating loss to $305 million in operating income, a turnaround that should compound as production expands. Backlog stands at $95.61 billion with a 1.10 book-to-bill.

The most telling signal came from the boardroom. On May 20, 2026, ten Northrop directors purchased 349 shares each at $552.17, a coordinated buy that strongly suggests management views the stock’s pullback as a gift. CEO Kathy Warden described the quarter as reflecting “our ability to deliver in today’s unprecedented global demand environment.”

Risk: The B-21 LRIP program still has memory of a $477 million loss provision, and government shutdown risk is explicitly not in guidance.

RTX Corp (NYSE: RTX)

RTX (NYSE:RTX) is the only one of the three to raise full-year guidance after Q1, and its price action shows it. The stock trades at $188.54, up 32% over the past year and 4% in the past month. Forward P/E of 27 is the highest of the trio, but the growth profile justifies it. The yield is 1%, and analysts carry a target of $215.73.

The bull case is execution. Q1 2026 adjusted EPS of $1.78 beat the $1.52 estimate by 17%, the eighth consecutive quarterly beat. RTX then raised its FY2026 outlook to adjusted sales of $92.5 to $93.5 billion and adjusted EPS of $6.70 to $6.90. Backlog finished Q1 at $271 billion, split $162 billion commercial and $109 billion defense. Recent wins include a $1.1 billion U.S. Navy AIM-9X contract and a $515 million SPY-6 radar contract. CEO Chris Calio cited “organic sales and adjusted operating profit growth across all three segments” as the reason for the raise.

Risk: The Pratt & Whitney powder metal matter requiring accelerated GTF fleet inspections remains a multi-year cash drag, and tariff exposure at Collins and Pratt is a watch item.

What to Watch in July

Q2 earnings land in late July for all three. Lockheed and Northrop report on the same calendar week, with RTX close behind. The question is whether RTX raises again, whether Northrop’s B-21 momentum is sustainable, and whether Lockheed can put the F-16 charge behind it. With backlogs collectively approaching $560 billion and a defense budget trajectory that only points higher, the setup favors continued operational delivery over multiple expansion.

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