Earnings for Q1 2025 are rolling out. Some companies in an unexpected industry posted strong results. In turn, Wall Street analysts are upgrading these stocks. While investors wouldn’t generally think manufacturing-heavy stocks would perform well during a period of tariff uncertainty, that is exactly what has happened in the aerospace and defense industry.

Demonstrating this is that the return of the iShares U.S. Aerospace & Defense ETF (BATS: ITA) is the inverse of the overall market in 2025. As of the April 25 close, ITA has provided a total return of approximately 6%. In contrast, the return of the S&P 500 Index is approximately -6%.

Aerospace and defense earnings impressed in Q1. The analysis below will detail these three companies and how Wall Street analysts react to their results and other news.

All return and other metrics use data as of the April 25 close unless otherwise indicated.

Boeing: A Comeback in the Making?

Boeing (NYSE: BA) is one of the most talked-about companies in this industry. Unfortunately, most of the news around this firm has been bad for some time. However, Boeing posted results that were significantly better than expected in Q1. Although Boeing reported an adjusted loss per share of -$0.49, analysts thought it would lose much more. Boeing beat the consensus Wall Street loss per share estimate of -$1.30. The company saw revenues increase by 18% after four straight quarters of negative growth.

The firm’s commercial plane deliveries grew by 57% from a year ago, and its adjusted operating margin flipped back into positive territory from -2.3% to 1%. Analysts tracked by MarketBeat since the April 23 earnings release either raised or reiterated their price target on Boeing. On average, their price targets increased by 8%.

Overall, there is some reason for cautious optimism around Boeing. However, Chinese firms are not accepting delivery of around 50 planes due to tariffs, complicating the company’s outlook. Boeing is looking for other companies to take the planes, including Air India, which may buy 10.

Lockheed Martin: Strong Q1, Potential for “Golden Dome” Deal

Lockheed Martin (NYSE: LMT) beat consensus estimates on earnings per share (EPS) in Q1 by nearly $1, posting a figure of $7.28. It also beat moderately on sales, which grew by over 4%. Lockheed Martin has a massive backlog of $173 billion, equal to 2.4 times its total sales in 2024. 

Boeing beat Lockheed to win a $20 billion contract to build the U.S. Air Force’s next fighter jet. Still, the company keeps winning other contracts. It recently gained several contracts worth up to $10 billion for offensive and defensive missile systems. 

The company could also win billions in additional rewards. Republican lawmakers plan to introduce a defense package that would allocate $27 billion for Trump's “Golden Dome” missile defense shield and require buying more Terminal High Altitude Area Defense (THAAD) antiballistic missile batteries from Lockheed Martin.

Since earnings on April 23, one analyst from MarketBeat raised its price target by 4%. Another upgraded the stock from neutral to outperform. Morgan Stanley also recently put out a note saying that Lockheed Martin looks “mostly insulated” from tariffs. The firm has a $575 price target on the stock. Overall, the average of these three analyst price targets implies nearly 13% upside in shares.

GE Aerospace: Impresses Bank of America With Tariff Mitigation Capabilities

Last up is GE Aerospace (NYSE: GE). The company blew past estimates on both EPS and sales as revenue rose by 11% and adjusted operating margin increased by 460 basis points. GE Aerospace also has a massive backlog of $140 billion, which is over three times its revenue in 2024. Analysts at Bank of America recently put out a research note praising the company’s proactive tariff mitigation strategy. The analysts saw the firm sticking to its guidance, even with $500 million in extra tariff costs, as a good sign. The firm's Chief Executive Officer also met with President Trump recently to lobby against tariffs.

Since the earnings release on April 23, two analysts tracked by MarketBeat have raised their price target on GE Aerospace. Those price targets released after earnings imply an average upside in shares of GE Aerospace of nearly 11%.

Overall, the aerospace and defense industry is getting off to a surprisingly good start in 2025. So far, there is reason to believe some of these names may perform better amid tariffs than one would intuitively think.

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