How do you value a defense contractor?
Curious about this.
I imagine there are so many inputs like government contracts and a lot of geopolitical and macro inputs that would go into valuing a defense contractor like Lockheed or Raytheon
Curious about this.
I imagine there are so many inputs like government contracts and a lot of geopolitical and macro inputs that would go into valuing a defense contractor like Lockheed or Raytheon
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Nice try terrorist
I'd go about it as any other business. You model out the cash flows in a traditional DCF.
The reason why I wouldn't do a top-down analysis is because defence spending varies a lot from country to country, and it may not necessarily match the Company's product portfolio. I prefer to present the macro environment as a more qualitative support to why my modelled growth seems feasible, rather than get into an argument on how France's increase in defence spending from 1.3% of GDP to 2.0% of GDP will directly affect how many fighter jets LMT will sell.
It’s worth what someone else will pay for it. Use transactional comps such as EV/EBITDA.
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