- Raytheon's substantial commercial exposure sees light at the end of the tunnel with the vaccine news, setting off its recent rebound.
- But Raytheon will still have to deal with slowed investment for a long-time, while defence pure-play BAE Systems' concerns have largely evaporated.
- Vaccine promises relief for BAE's Middle Eastern exposure, and the Biden win reduces risks for foreign contractors.
- They also have more diversified tax exposures to mitigate the inevitable Biden tax hikes.
- We are still overweight defence pure-plays, but we add foreign BAE Systems to the list while their discount is still the same as Raytheon's.
For further details see:
Recent Developments Help Raytheon, But They Help BAE Systems More