Josh Brown's Aerospace & Defense Stock Analysis: Technical Strength and Fundamental Momentum

This analysis is based on Josh Brown’s appearance on CNBC’s “Halftime Report” [1] on November 11, 2025, where he spotlighted aerospace and defense stocks as part of his “Best Stocks in the Market” series. The recommendations were driven by what Brown characterized as a secular tailwind from global geopolitical tensions, with the U.S. expected to spend nearly $900 billion on defense in 2025, representing an all-time high [1].

The analysis reveals a compelling convergence of technical strength and fundamental performance across the recommended stocks. Brown’s technical assessment highlighted Raytheon Technologies (RTX) and General Dynamics (GD) as having “pristine charts” with strong momentum indicators, while L3Harris Technologies (LHX), though described as “messier” for trading entry, maintained a solid uptrend [1]. This technical strength is supported by robust fundamental metrics, including record backlogs, margin expansion, and strong earnings performance across all three companies [1].

The market reaction to Brown’s recommendations was measured but positive. RTX gained 0.23% on the event day and continued climbing to $179.49, representing a 51% year-to-date gain [0]. LHX showed stronger immediate response with a 1.61% gain on November 11, while GD added 0.85% [0]. The performance occurred against a backdrop of mixed broader market conditions, with the S&P 500 gaining 0.45% on November 11 but declining 0.42% the following day, while the industrials sector outperformed with a 0.30% gain [0].

The aerospace and defense sector’s appeal stems from its unique positioning in the current market environment. Unlike consumer-facing businesses, these companies enjoy advantages with government institutions and benefit from non-discretionary spending patterns [1]. The sector’s performance is underpinned by record backlogs providing revenue visibility, with RTX reporting a record $251 billion backlog, LHX achieving record backlog status, and GD showing 19% year-over-year backlog improvement [1].

Brown’s emphasis on technical analysis proved prescient, particularly regarding RTX’s chart pattern. The stock successfully retested the low $170s with buyers preventing a fall back into the recent gap, while the RSI remained in the high 60s indicating sustained momentum [1]. The 50-day moving average around $165 was quickly bought, suggesting strong institutional support. This technical strength preceded and complemented the fundamental story of 104% free cash flow growth and margin expansion across all segments [1].

The analysis reveals important distinctions in technical profiles even within the same sector. While RTX and GD exhibit “pristine chart” characteristics with buyers consistently purchasing dips, LHX’s “messier” technical profile suggests higher volatility potential [1]. However, LHX’s position 21% above its 200-day moving average indicates underlying strength, making it suitable for horizontal trading range strategies for long-term investors [1]. This divergence suggests that sector selection alone is insufficient; individual stock technical analysis remains crucial.

The removal of Axon Enterprise (AXON) from the recommendation list in October after breaking below its 200-day moving average provides a valuable case study in technical risk management [1]. AXON’s subsequent performance, declining 15% since the removal and currently trading at $570.01, demonstrates how quickly technical damage can translate into fundamental underperformance [0]. The stock’s elevated P/E ratio of 180.38x [0] further illustrates how high-growth expectations can compound risk when technical support fails.

: The analysis reveals significant valuation risk across the recommended stocks. RTX trades at 36.86x P/E, LHX at 32.46x, and GD at 22.81x [0]. These elevated multiples, particularly for RTX and LHX, suggest limited margin for error and increased vulnerability to earnings disappointments or multiple compression.

: The entire investment thesis is predicated on sustained global defense spending increases. Any major geopolitical de-escalation or shift in defense priorities could substantially impact the secular tailwind narrative that underpins these recommendations [1].

: LHX’s characterization as “messier” technically suggests potential for increased volatility, while the AXON example demonstrates how quickly technical breakdowns can occur [1]. The sector’s performance could be impacted by broader market rotations away from defense stocks.

: The record backlogs across RTX ($251 billion), LHX, and GD (19% YoY improvement) provide significant revenue visibility and potential for earnings surprises as these backlogs are converted to recognized revenue [1].

: All three companies demonstrated margin improvement in recent earnings, with RTX showing expansion across all segments and GD improving operating margins by 30bps sequentially [1]. This trend suggests potential for continued operational efficiency gains.

: With U.S. defense spending expected to reach nearly $900 billion in 2025, the sector benefits from a non-discretionary spending environment that should provide resilience during economic downturns [1].

The aerospace and defense sector, as highlighted by Josh Brown, presents a compelling case for investment based on the convergence of technical strength and fundamental performance. RTX and GD exhibit particularly strong technical characteristics with “pristine charts,” while all three companies demonstrate robust fundamental metrics including record backlogs and margin expansion [1]. The sector benefits from secular tailwinds including record U.S. defense spending and geopolitical tensions that support non-discretionary government spending [1].

However, investors should be aware of significant risks including elevated valuations (RTX at 36.86x P/E, LHX at 32.46x P/E), geopolitical dependency, and technical volatility, particularly for LHX [0][1]. The AXON case study demonstrates the importance of technical risk management, as the stock declined 15% after breaking below its 200-day moving average [0][1].

Key technical levels to monitor include RTX support at $165 and GD support at the July gap low of $310 [1]. The investment thesis appears most compelling for long-term investors who can weather potential volatility and benefit from the sector’s revenue visibility and secular growth trends.