European defense stocks are declining ahead of Friday's meeting between US President Donald Trump and his Russian counterpart Vladimir Putin.
On Monday, several European defense stocks are declining. Swedish defense company Saab is down 2.5 percent, German giant Rheinmetall is back nearly 4 percent, Italian Leonardo is over 1 percent minus and French Thales is down just as much.
It's clear that there may be investors who choose to look at other companies now that they have had such a strong rise, says Danske Bank's analyst Björn Enarson.
Continue to arm
US President Donald Trump and Russian President Vladimir Putin will meet to try to negotiate an agreement to end the war in Ukraine. Trump said at the end of last week that he believed a peace agreement was "very close". An end to the war does not change Europe's already decided armament.
Sweden will continue to arm up and Sweden will of course not only buy American weapons but will live mainly on European systems.
Danske Bank's analyst Björn Enarson points out that several of the support packages for Ukraine have not been favorable for European defense companies.
It's a lot about financing the purchase of American weapons. It does not benefit Saab and their European competitors at all.
Taking home profit
Danske Bank has a sell stamp on Saab after the stock's strong rise in recent years. Björn Enarsson simultaneously points out that the company has a strong order book and is expected to continue to have a strong order intake.
I'm not worried that it will go badly for Saab as a company, but I think maybe the stock prices in a bit too much.
