Global markets are still trying to make sense of sticky inflation, shifting rate expectations and mixed economic data from the US, Europe and Asia. In that kind of backdrop, many investors are looking for sectors where demand is influenced as much by long planning cycles and government priorities as by the latest growth headlines. The Aerospace and Defense screener focuses on companies that manufacture or provide services to these industries, where contracts can be large, complex and long term. This article highlights three stocks from that screener and explains why they might deserve a place on your watchlist.

Firefly Aerospace (FLY)

Overview: Firefly Aerospace is a US space and defense technology company that provides launch, spacecraft and mission services for national security, government and commercial customers. Its portfolio ranges from Alpha and Eclipse launch vehicles to Blue Ghost and Elytra spacecraft platforms, as well as software, sensors and lunar imaging services like Ocula.

Operations: Firefly Aerospace generates about US$184.9 million in revenue from Aerospace & Defense activities, entirely from customers in the United States.

Market Cap: US$3.3b

Firefly Aerospace stands out in the screener because it sits at the intersection of launch, spacecraft and mission services that governments rely on for long term programs. Revenue grew 70.7% over the past year to a still modest base. However, the company remains loss making with a reported Q1 2026 net loss of US$96.68 million and a high P/S ratio of 17.2x. Recent NASA and US defense related contracts, including a US$144 million lunar mission award and work on programs like Golden Dome and FORGE, point to deepening government relationships. At the same time, the forecast for ongoing losses, heavy borrowing and a highly volatile share price mean you are taking on meaningful risk in return for that growth potential.

Firefly Aerospace sits at the heart of fast rising space demand, yet a high P/S ratio and ongoing losses raise big questions about what is already priced in. For the full picture, see the 2 key rewards and 2 important warning signs (1 is major!).

Carpenter Technology (CRS)

Overview: Carpenter Technology is a long established US based producer of specialty metals, supplying titanium alloys, stainless and alloy steels, and high performance metal powders and parts to aerospace, defense, medical, energy, transportation, industrial and consumer customers around the world.

Operations: Carpenter Technology generates the bulk of its US$3.1b revenue from Specialty Alloys Operations at US$2.7b, with Performance Engineered Products contributing about US$379.1 million.

Market Cap: US$28.8b

Carpenter Technology gives you direct exposure to the demand for high performance alloys used in next generation aircraft, power generation and electrification. Aerospace and defense account for more than half of sales, and recent guidance has indicated higher operating income targets. At the same time, the stock trades on a premium P/E, earnings are closely tied to cyclical end markets and the group is committing around US$400 million to a capacity expansion that will only pay off if demand holds up. Strong profitability, high ROE and a long operating history characterize this as a higher quality business, but the combination of insider selling and elevated borrowing means you should understand the full risk reward trade off before adding Carpenter Technology to your watchlist.

Carpenter Technology’s premium P/E and planned US$400 million expansion suggest that the story might be bigger than a typical metals stock. Get the full risk and quality picture in the 2 key rewards and 1 important warning sign

RTX (RTX)

Overview: RTX Corporation is a large aerospace and defense group that supplies aircraft engines, critical aircraft systems and missile and radar technology to commercial airlines, aircraft makers and government defense customers worldwide through its Pratt & Whitney, Collins Aerospace and Raytheon segments.

Operations: RTX generates most of its revenue from Pratt & Whitney at about US$35.0b, Collins Aerospace at about US$31.2b and Raytheon at about US$29.9b, partially offset by eliminations and other items of about US$2.6b.

Market Cap: US$294.4b

RTX may appeal to investors seeking a large, diversified aerospace and defense company with a record US$289b backlog, rising demand for commercial aerospace and missile systems, and a long operating history. Earnings have grown 14.3% per year over the past 5 years and are forecast to keep growing, while the current P/E is slightly below both estimated fair value and the US Aerospace & Defense average. At the same time, RTX carries high debt, faces ongoing jet engine cost and reliability risks and depends heavily on defense budgets and tariffs remaining manageable. The mix of execution, technology investments and real financial risks means RTX is a stock where the details matter.

RTX’s huge backlog and global reach suggest a story that many investors may be only half seeing. Weigh the scale against the balance sheet and contract risks in the 4 key rewards and 2 important warning signs

The three Aerospace and Defense stocks in this article are only a starting point, as the full screener surfaced 66 more companies with equally compelling narratives across the value chain, which you can review in the Aerospace And Defense screener. Use Simply Wall St to identify and analyze the specific catalysts and narratives that matter to you so you can focus on the highest conviction opportunities for your watchlist.

Take Control of Your Investment Journey

If Carpenter Technology or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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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.