Finance Halo
Company Overview
Elbit Systems Ltd. (ESLT) is a global defense electronics company engaged in the development, manufacturing, and supply of a wide range of aerospace, ground, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems. The company is a significant player in the defense industry, serving military and law enforcement customers worldwide. Elbit Systems operates across multiple segments, including airborne solutions, C4ISR, unmanned aircraft systems, and electro-optics, positioning itself as a comprehensive provider of advanced defense technologies.
Price Action Analysis
Daily Chart (3-Month View): The daily chart displays a generally upward trend with periods of consolidation and volatility. Following a notable dip in late October and early November, the price began a recovery in mid-November, showing increasing momentum through December. Volume has been mixed but generally increased during the upward price movements, particularly around mid-December and the recent trading days. Key resistance appears to be forming near the $580 level, while support is observed around the $540-$550 range. Recent candlesticks show some choppiness, indicating potential indecision or profit-taking at higher price levels.
Weekly Chart (2-Year View): The weekly chart reveals a strong, long-term uptrend for Elbit Systems. Since early 2023, the stock has experienced significant appreciation, more than doubling its value. The trend is characterized by higher highs and higher lows, with substantial volume supporting the rallies. While there have been pullbacks, they have been relatively shallow and quickly followed by renewed buying pressure. The price is currently pushing into new high territory, suggesting sustained positive momentum.
News & Catalysts
Recent news and analyst updates for Elbit Systems Ltd. (ESLT) indicate a generally positive outlook, although with some mixed signals from analysts.
- Analyst Ratings: While some analysts maintain a "Buy" or "Moderate Buy" stance (e.g., Bank of America Securities, Morgan Stanley), others have "Hold" ratings (e.g., J.P. Morgan, Kristine Liwag). Price targets vary, with the average hovering around $553.67, suggesting some analysts see limited upside from current levels, while others have recently increased their targets.
- Financial Performance: Elbit Systems has reported strong revenue growth and a robust order backlog in recent quarters. Exceeding earnings per share estimates in Q3 2025 and a significant international contract further underscore the company's operational strength and future revenue potential.
- Business Developments: Key developments include contracts for defense systems in Greece and Israel, the delivery of advanced radar and training systems in the UK, and the unveiling of AI-based defense solutions. These illustrate the company's continued innovation and its ability to secure substantial international orders.
- Market Sentiment: Despite positive company-specific news, activist protests and insurer concerns introduce a layer of complexity to investor sentiment.
These factors collectively influence price action by driving demand for Elbit's products and services while also introducing potential risks that analysts and investors monitor.
Fundamental Analysis
Elbit Systems Ltd. demonstrates a solid financial footing, characterized by consistent revenue growth and improving profitability.
Key Financial Metrics
| Metric | Value |
|---|---|
| Current Price | $579.00 |
| Market Cap | $26.89B |
| Return on Equity | 12.90% |
| Profit Margins | 5.91% |
| Dividend Yield | 0.52% |
Financial Performance (Annual)
| Metric | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total Revenue | $6.83B | $5.97B | $5.51B | $5.28B |
| Gross Profit | $1.64B | $1.48B | $1.37B | $1.36B |
| EBIT | $474.41M | $323.82M | $333.71M | $407.71M |
| Net Income | $321.14M | $215.13M | $275.45M | $274.35M |
| Diluted EPS | $7.18 | $4.82 | $6.18 | $6.20 |
| Free Cash Flow | $319.56M | -$73.33M | $34.96M | $228.31M |
Earnings Summary (Quarterly)
| Metric | Q3 2025 | Q2 2025 | Q1 2025 |
|---|---|---|---|
| Revenue | $1.92B | $1.97B | $1.90B |
| Diluted EPS | $2.80 | $2.69 | $2.35 |
Analyst Estimates & Revisions
- Earnings: Analysts project continued growth, with EPS expected to increase from $12.08 in 2024 to $13.92 in 2025. Quarterly estimates also show an upward trend.
- Revenue: Projected revenue for 2025 is around $7.88 billion, with expectations for further growth in 2026.
- Revisions: Recent earnings estimate revisions show a mix of upgrades and downgrades, suggesting some volatility in near-term expectations.
- Recommendations: The current consensus is a "Hold" rating, with a majority of analysts recommending a "Hold" and a few suggesting "Buy."
Analyst Price Targets
The average 12-month price target is approximately $544.60, with a range from $518.00 (low) to $580.00 (high). This indicates that while some analysts see potential upside, the average target is slightly below the current trading price.
Key Takeaways:
- Elbit Systems exhibits strong revenue growth and a healthy order backlog, indicating robust demand for its products.
- Profitability has shown an improving trend, with net income and EPS increasing.
- Free Cash Flow has been somewhat volatile but positive in the most recent annual period.
- Analyst sentiment is mixed, leaning towards a "Hold," with price targets suggesting limited immediate upside from the current levels.
Market & Sentiment Context
- Market Context: Elbit Systems operates within the global defense industry, which is influenced by geopolitical tensions, increased defense spending by governments, and technological advancements. The sector is generally seen as a defensive play, but with growth potential driven by evolving security landscapes. Broader market sentiment towards defense stocks can be influenced by government budgets, international relations, and specific conflict zones.
- Catalysts: Key catalysts include ongoing government contracts, development and deployment of new defense technologies (like AI and laser systems), and successful execution of large international orders. Earnings reports and analyst revisions also play a significant role in shaping investor sentiment. The recent substantial international contract and approvals from Greece and Israel are positive catalysts.
- Investor Sentiment: The current price action, with the stock trading near all-time highs, suggests positive investor sentiment. However, the mixed analyst ratings and price targets indicate some caution. Volume has generally supported recent upward price movements, but the choppiness on the daily chart suggests some consolidation or profit-taking at higher levels. The long-term uptrend on the weekly chart points to sustained investor confidence over a longer horizon.
Investment Outlook
Elbit Systems exhibits a strong long-term uptrend driven by consistent revenue growth and a robust order backlog in the defense sector. The company's ability to secure significant international contracts and develop innovative technologies positions it well for continued expansion.
While recent quarterly earnings have been positive and revenue growth remains strong, the mixed analyst ratings and price targets suggest that the market may be pricing in much of the near-term optimism. The current valuation, with a higher forward P/E ratio, reflects these positive expectations.
From a trend-following perspective, the long-term weekly trend remains strongly bullish. However, the daily chart shows signs of consolidation and potential resistance near current levels. Investors should monitor key support and resistance levels closely.
Risk-managed trade ideas would focus on:
- Buying on dips: Targeting established support levels where previous buying interest emerged.
- Breakout confirmation: Waiting for a clear and sustained move above the current resistance, ideally with increased volume.
- Stop-loss orders: Implementing protective stop-losses below key support levels to manage downside risk.
Key Buy/Sell Levels
The current price for Elbit Systems Ltd. (ESLT) is $579.00.
Support Levels
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$550 - $555 (Touched): This range acted as a resistance in mid-December before being broken. It has recently been re-tested and held as support. The distance from the current price is negligible (approx. $0.00 to $24.00, or 0.00% to 4.15%). This level also aligns with the upper band of the previous consolidation on the daily chart.
-
$520 - $530 (Not Touched): This zone represents a more significant support level, coinciding with price levels seen in early December and prior to the recent surge.
- Distance from current price: $49.00 to $59.00 (approximately 8.46% to 10.19%).
- This area also aligns with the lower boundary of the consolidation before the breakout, and where the price found support in early December.
Resistance Levels
-
$580 - $585 (Approaching/Touched): This is the immediate resistance zone, where the price has encountered selling pressure. A decisive break and sustained move above this level would indicate continued upward momentum.
- Distance from current price: Currently trading within this range or just below it.
-
$600+ (Psychological/All-time High Area - Not Touched): This is a key psychological level and potentially the next all-time high area. Breaking and holding above this level would signal a continuation of the strong uptrend.
- Distance from current price: $15.00+ (approximately 2.59%+)
I will draw horizontal lines at these key support and resistance levels to visualize them on the chart.
Summary & Takeaways
Elbit Systems Ltd. is demonstrating a strong long-term uptrend, supported by consistent financial performance, a substantial order backlog, and strategic advancements in defense technology. The company's ability to navigate geopolitical complexities and secure significant global contracts underpins its market position.
Key observations:
- Price Action: The weekly chart confirms a robust, long-term bullish trend. The daily chart shows recent upward momentum after a consolidation period, though it is now facing resistance near all-time highs.
- Fundamentals: Solid revenue growth, improving profitability, and a strong order pipeline are positive indicators. However, analyst sentiment is mixed, with a prevailing "Hold" recommendation and average price targets suggesting limited immediate upside from current levels.
- Market Context: The defense sector benefits from increased global spending, but geopolitical sensitivities and activist pressures present potential risks.
- Investment Outlook: The outlook remains cautiously optimistic. While the long-term trend is positive, near-term trading may be range-bound until a decisive breakout above current resistance occurs.
Trading Levels:
- Support: Key support is observed at $550-$555 (recently tested) and a more significant level at $520-$530.
- Resistance: Immediate resistance is at $580-$585, with the next major psychological and potential all-time high level around $600+.
Investors seeking to enter positions might consider accumulating shares on pullbacks towards the support levels, especially if they hold. A decisive move above $585, with strong volume, could signal a continuation of the rally towards the $600+ area. Strict risk management with stop-losses below key support levels is advised given the current price approaching historical highs and mixed analyst outlook.