Two Overseas And Under The Radar Aerospace Stocks Pass Buy Points

Two foreign defense stocks surged this week as Middle East tensions ramped up global demand for advanced military systems.

The Israeli aerospace company Tat Technologies (TATT) and the Italian defense juggernaut Leonardo DRS (DRS) have both gained about 5% this week, according to MarketSurge. This week’s gains come as the U.S. began a war with Iran. The conflict has embroiled much of the Middle East, especially Israel, where Tat is based. The possibility the war could expand or become an extended military operation helped fuel the stock gains.

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Even before the war in Iran, both companies already held healthy gains thanks to the prospect of increased military spending in the U.S. and among North Atlantic Treaty Organization countries. President Donald Trump has demanded NATO partners step up their defense spending.  Trump also said earlier this year he wanted to increase the military budget by 50% — welcome news for defense companies.

Defense Stocks: Tat Technologies and Leonardo DRS

Tat, which has several locations in the U.S., including in Charlotte, N.C., and Tulsa, Okla., is predominantly an aerospace company that provides maintenance and repair services for military aircraft. It also manufactures various parts for military planes, including engine components, heat exchangers and high-pressure valves.

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Meanwhile, the Rome-based Leonardo is one of Europe’s top defense firms and a key supplier to NATO. Among its most notable products are military helicopter models AW139 and AW101, the Eurofighter Typhoon and an array of naval weaponry systems. Leonardo does business with the federal government through its U.S. subsidiary Leonardo DRS.

Both stocks have had excellent starts to 2026. Tat is up about 30% since the start of the year. Leonardo is up close to 35%.

Tat Technologies

Tat broke out of a shallow base with a buy point of 45.83 in December. It rebounded from 10-week support early in February. Shares are extended from both moves.

The current share price around 59.50 is just above the mean analyst price target of 58.67, according to FactSet.

In a February research report, analysts from Lake Street Capital, who rated the stock a buy with a $59 price target, said they expect the company to invest in expanding its production capabilities and to complete an M&A deal this year.

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“We believe the stock can continue to grind higher from these levels as investors better appreciate the durability of growth and shares continue to benefit from the positive sentiment in the broader A&D (aerospace/defense) sector,” wrote senior research analyst Jason Schmidt.

Leonardo DRS

Shares of Leonardo broke out of a flat base on Feb. 24, when they rose close to 15% in the session after earnings breezed past Wall Street expectations.

The defense stock is already more than 5% above a flat base buy point of 43.25. Aggressive investors could plot an alternative entry at 45.70, which would place the stock in a buy zone.

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During Leonardo DRS’ most recent earnings call, the company reported revenue growth of 8% to $1.06 billion and an adjusted diluted earnings gain of 11% to 42 cents a share. The company’s 2026 guidance forecasts revenue growth between 6% and 8%. In 2025, its overall backlog grew 3% to a total of $8.7 billion.

The company is investing heavily in developing new products, closing 2025 with a 40% increase in research and development (R&D) spending and 60% higher capex.

“Our R&D investment is focused on expanding our footprint in high-growth markets, including airborne, missiles, space and unmanned markets, while continuing to build share in our core ground and naval domains,” CEO John A. Baylouny said during an investor call. “Additionally, the emphasis of our R&D initiatives is on advancing platform AI and enabling platform autonomy, stronger security and modularity, and extending our platform-agnostic capabilities to new missions and platforms.”

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