Leonardo DRS, Inc. (DRS) is gaining analyst attention as a standout industrial stock, with multiple Wall Street firms upgrading their ratings amid sustained defense spending and strong contract visibility. The company's strategic position in aerospace and defense systems underpins its appeal.
- DRS reported $1.8B in revenue for fiscal 2024 with a 37.2% gross margin
- Backlog stands at $6.4B, supporting earnings visibility through 2026
- Analyst consensus includes multiple 'Buy' ratings and price targets up to $150/share
- Forward P/E of 18.5 is below industrial sector average
- 12% average annual revenue growth over the past three years
- Strong exposure to U.S. DoD and international defense contracts
Leonardo DRS, Inc. (DRS) has emerged as a focal point among Wall Street analysts evaluating industrial stocks, particularly within the defense and aerospace subsector. Recent analyst reports indicate a consensus shift toward bullish sentiment, with several firms upgrading the stock from 'Hold' to 'Buy' over the past quarter. This momentum follows DRS's delivery of advanced electronic warfare and surveillance systems to U.S. military programs, reinforcing its revenue stability and growth trajectory. Analysts highlight DRS's diversified contract portfolio, including multi-year agreements with the U.S. Department of Defense and international defense customers. The company reported $1.8 billion in revenue during fiscal year 2024, with a gross margin of 37.2%—above the industrial sector average. Additionally, DRS maintains a robust backlog of $6.4 billion, signaling strong future earnings visibility through 2026. The stock currently trades at a forward P/E ratio of 18.5, which analysts consider favorable given the company's 12% annual revenue growth over the past three years and its exposure to high-growth defense technologies such as directed energy and cyber defense systems. Investment firms have set 12-month price targets ranging from $135 to $150 per share, implying a potential upside of 14% to 28% from current levels. The broader defense sector is benefiting from increased global military spending, with U.S. defense appropriations projected to exceed $870 billion in fiscal year 2025. DRS's alignment with these trends positions it as a key beneficiary of sustained government investment in advanced defense infrastructure.