Inflation signals, shifting producer prices and uneven growth across regions are keeping investors focused on resilience and cash flow quality. Aerospace and defense stocks sit at the crossroads of government spending, long project backlogs and globally integrated supply chains, which can be appealing when policy, energy costs and bond yields are in flux. This Aerospace And Defense screener filters for companies that manufacture or provide services to the sector, helping you narrow a broad universe to a more focused watchlist. In this article, you will see 3 stocks highlighted from the screener and why they may deserve a closer look.

Howmet Aerospace (HWM)

Overview: Howmet Aerospace is a Pittsburgh based manufacturer of high performance metal components like engine parts, fasteners and forged wheels that are critical to modern commercial jets, military aircraft and heavy trucks worldwide.

Operations: Howmet generates most of its revenue from Engine Products at about US$4.6b, followed by Fastening Systems at about US$1.8b, Forged Wheels at about US$1.1b and Engineered Structures at about US$1.1b, with small inter segment eliminations.

Market Cap: US$111.1b

Investors looking at Howmet Aerospace are getting exposure to a supplier tied into long cycle commercial and defense programs, with strong demand for advanced engine components and fasteners supporting high margins. Recent results show revenue and EPS momentum, while high Return on Equity and management’s focus on automation and capacity build outs point to productivity gains. The flip side is a very high P/E multiple, meaningful debt and reliance on a handful of major OEM customers, plus recent insider selling and a relatively new management team that could add execution risk. The key consideration is whether the quality of this franchise justifies those expectations or calls for more caution at today’s valuation.

Howmet Aerospace’s premium P/E, strong margins and long cycle programs raise a bigger question: are expectations already stretched, or still underestimating the story hiding in the 2 key rewards and 2 important warning signs?

Mercury Systems (MRCY)

Overview: Mercury Systems is a U.S. based defense technology company that supplies high performance computing, signal processing, and secure electronics used in radar, electronic warfare, intelligence and aerospace platforms for government and defense contractors.

Operations: Mercury Systems generates essentially all of its US$967m in revenue from Aerospace & Defense solutions, primarily serving customers in the United States with additional sales in Europe.

Market Cap: US$6.8b

Mercury Systems offers investors exposure to the push toward more digital, software-defined defense systems, with its secure embedded processing and Common Processing Architecture servers used in radar, EW and space programs. Recent contracts for 1,000 BuiltSECURE servers and record bookings are cited as indicators of demand and provide additional visibility on future revenue, even as the company continues working through older, lower margin backlog and recent losses. Expectations for earnings recovery and margin changes depend on management shifting the mix to higher value contracts and executing on factory improvements. For investors, a central consideration is whether the current valuation already reflects that transition or leaves room if the thesis in the analyst narrative is realized.

Mercury Systems’ push toward digital defense, record bookings and the shift to higher value contracts could be masking the real inflection point in its story, and the analyst forecasts for Mercury Systems may reveal what the market is missing

Astronics (ATRO)

Overview: Astronics designs and manufactures electrical power, lighting, connectivity and test systems that sit inside commercial and military aircraft, as well as automated test equipment used by aerospace, defense and electronics customers worldwide.

Operations: Astronics generates the vast majority of its roughly US$887m in revenue from the Aerospace segment at about US$819.8m, with the Test Systems segment contributing about US$67.5m and negligible intersegment eliminations.

Market Cap: US$3.5b

Astronics provides exposure to aircraft production and airline cabin upgrades, with Q1 2026 sales of US$230.6m and higher full-year guidance indicating demand for its power and lighting systems, plus a sizable U.S. Army radio test order that supports the Test Systems recovery. At the same time, a very high P/E, heavy use of debt and past project missteps in Test mean earnings are sensitive to execution, tariffs and aerospace cycles. If you are weighing whether the growth in high margin aerospace products and new Qi2 wireless charging modules outweighs these pressures, the detailed story around profitability, cash generation and risk concentration becomes critical.

Astronics’ high margin aerospace focus, Qi2 charging rollout and radio test win suggest that the story could be accelerating faster than the headline P/E implies, and the analyst forecasts for Astronics may highlight the twist investors are missing

The three aerospace and defense stocks covered here are only a starting point, with the full Aerospace And Defense screener surfacing 298 more companies that each carry their own potential catalysts and risk stories. Use Simply Wall St to identify, analyze and filter for the specific cash flow quality, backlog visibility and defense or commercial exposure that fit your thesis, so you can focus on the highest conviction ideas in this theme.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.