02-02-2025, 06:40 PM
Investing.com -- President Trump signed the Iron Dome for America Executive Order (IDFA), marking an expansion of U.S. missile defense systems with significant implications for defense contractors.
In a note reacting to the news, TD Cowen analysts described the initiative as a “massive expansion of space- and ground-based systems, to include space-based interceptors,” estimating it could require “tens of $Bs to develop and field.”
The order directs the Pentagon to develop a plan within 60 days, with funding requests expected in the FY26 Department of Defense budget.
TD Cowen said that for context, the DoD has already allocated $28.4 billion for “missile defeat and defense” in FY25.
TD Cowen expects the program to be a priority, benefiting major defense companies, including Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), RTX, L3Harris, and Boeing (NYSE:BA).
IDFA is modeled after President Reagan’s Strategic Defense Initiative and aims to counter a wide range of threats, including “ballistic, hypersonic, advanced cruise missiles, and other next-generation aerial attacks.”
It will also expand the Space Development Agency’s Proliferated Warfighter Space Architecture, which relies on constellations of small satellites for missile detection and tracking.
Though the executive order does not specify all programs, TD Cowen highlights several likely beneficiaries: Lockheed Martin’s NGI, THAAD, PAC-3 MSE, and AEGIS Ashore; Northrop Grumman’s GBI and GPI; RTX’s Standard Missile family; and L3Harris’s missile-tracking satellites.
Congress is expected to support the initiative, though TD Cowen anticipates resistance from some Democrats, particularly over arms control and treaty implications.
The bank notes that EO also calls for a review of Allied and Theater Missile Defense, potentially increasing allied participation and defense contracts abroad.
With IDFA positioned as a long-term strategic shift, analysts believe it will drive significant investments in missile defense and space-based security, reinforcing the sector’s growth outlook.
In a note reacting to the news, TD Cowen analysts described the initiative as a “massive expansion of space- and ground-based systems, to include space-based interceptors,” estimating it could require “tens of $Bs to develop and field.”
The order directs the Pentagon to develop a plan within 60 days, with funding requests expected in the FY26 Department of Defense budget.
TD Cowen said that for context, the DoD has already allocated $28.4 billion for “missile defeat and defense” in FY25.
TD Cowen expects the program to be a priority, benefiting major defense companies, including Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), RTX, L3Harris, and Boeing (NYSE:BA).
IDFA is modeled after President Reagan’s Strategic Defense Initiative and aims to counter a wide range of threats, including “ballistic, hypersonic, advanced cruise missiles, and other next-generation aerial attacks.”
It will also expand the Space Development Agency’s Proliferated Warfighter Space Architecture, which relies on constellations of small satellites for missile detection and tracking.
Though the executive order does not specify all programs, TD Cowen highlights several likely beneficiaries: Lockheed Martin’s NGI, THAAD, PAC-3 MSE, and AEGIS Ashore; Northrop Grumman’s GBI and GPI; RTX’s Standard Missile family; and L3Harris’s missile-tracking satellites.
Congress is expected to support the initiative, though TD Cowen anticipates resistance from some Democrats, particularly over arms control and treaty implications.
The bank notes that EO also calls for a review of Allied and Theater Missile Defense, potentially increasing allied participation and defense contracts abroad.
With IDFA positioned as a long-term strategic shift, analysts believe it will drive significant investments in missile defense and space-based security, reinforcing the sector’s growth outlook.