As the Iran conflict nears its ninth week, estimates pinned the cost of the conflict at roughly $1 billion to $2 billion per day prior to the ceasefire announcement. And while U.S. taxpayers are footing the bill, a select group of companies has seen heightened demand for their implements of war.
This week, aerospace and defense contractors began reporting Q1 2026 earnings. With the latest bout of geopolitical unrest in the Middle East having started on Feb. 28, the conflict has affected the top and bottom lines of companies like GE Aerospace (NYSE: GE), Northrop Grumman (NYSE: NOC), and RTX (NYSE: RTX).
For investors looking for insights into how much potential upside—if any—remains for those stocks, and how an expeditious and peaceful end to the conflict could impact their prices, here are some clues.
GE Aerospace: Double-Beat Included a 25% Increase in Revenue
GE Aerospace provides best-in-class propulsion solutions for a range of clients, including defense customers.
The U.S. military is one, and it has awarded the company with numerous multi-billion-dollar contracts.
Recent agreements include a $5 billion contract for F110 engines in 2025, a $1.4 billion contract for CH-53K helicopter engines in January 2026, and a $14.16 million, four-year U.S. Air Force contract for fuel control systems that lasts through June 2029.
While those deals were already on GE Aerospace’s books prior to the start of the Iran war, they still contributed to Q1 revenue. When the company reported on Tuesday, April 21, it announced revenue of $11.61 billion, beating analyst estimates and marking a 24.6% year-over-year (YOY) increase. Earnings per share (EPS) came in at $1.86, also above the consensus of $1.81, marking the company’s 14th consecutive beat.
In his earnings call comments, CEO Larry Culp addressed the conflict in the Middle East from his very first sentence, noting that the “dynamic geopolitical environment our industry is navigating” contributed to an 87% YOY increase in orders. Culp added that operating profit increased 18% YOY, EPS increased 25% YOY, and free cash increased 14% YOY. Total engine deliveries were up 43% YOY.
Nonetheless, GE shares slid more than 5% on the day as the market reacted negatively to management failing to raise full-year guidance. Valuation concerns remain as well. The stock's forward price-to-earnings (P/E) is around 37x, which contributed to profit-taking after Q1 financials were released.
Northrop Grumman: Top and Bottom Line Beats With B-21 Orders Nearing Delivery
Northrop Grumman is designing the B-21 Raider—a nuclear-capable subsonic stealth strategic bomber—as part of a $4.5 billion production deal with the U.S. Air Force.
As of April 2026, there are two B-21 Raiders undergoing flight testing at Edwards Air Force Base, with more in various production stages at Plant 42.
While still not battle-tested, the bombers already contributed to Q1 revenue for Northrop Grumman.
On Tuesday, April 21, the company reported Q1 EPS of $6.14, beating analyst expectations of $6.03. Quarterly revenue of $9.88 billion also surpassed estimates, marking a 4.4% YOY increase. The earnings beat marked Northrop Grumman’s 14th in the last 15 quarters.
“As we are seeing in recent military operations, many of our systems are playing a critical role in successfully executing the mission,” CEO Kathy Warden said in her earnings calling comments. Warden highlighted how demand for the company’s offerings is increasing, noting that “in the last two years, [Northrop Grumman has] opened over 20 new facilities and added more than 2 million square feet of manufacturing space across the United States.”
The stock, which has only mustered around a 3% year-to-date (YTD) gain, sold off after releasing Q1 financials, with shares sliding nearly 7% after investors reacted negatively to management reaffirming—rather than raising—full-year guidance.
RTX: Punished After a Double Beat
RTX, created through the 2020 merger of Raytheon and United Technologies, also impressed on Tuesday, April 21, with Q1 EPS of $1.78 coming in higher than the consensus estimate of $1.52, up 21% YOY.
Meanwhile, quarterly revenue of $22.08 billion was 8.7% high YOY and above analyst expectations of $21.38 billion.
Notably, the company has beaten earnings estimates every quarter since Q4 2016.
Adjusted sales came in at $22.1 billion, with management raising full-year sales and EPS guidance while maintaining free cash flow guidance.
“Our backlog is a record $271 billion, up 25% year-over-year, with strong commercial and defense awards in the quarter,” CEO Chris Calio said in his earnings call comments after acknowledging the ongoing situation in Iran.
“On the defense side of the business, we saw significant awards across all three segments, highlighting the strength of our product offerings. At Pratt, the military business was awarded over $3 billion for F-135 Lot 19 production,” Calio added.
Still, RTX sold off on Tuesday, with shares falling by more than 4%, which dragged the stock into the red on the year.
How Much Upside Can Defense Contractors Still Deliver?
Despite the market’s negative reactions on Tuesday, all three defense contractors remain in the favor of analysts, with each carrying a Moderate Buy rating. Consensus one-year price targets suggest that GE has upside potential of more than 27%, NOC more than 22%, and RTX more than 12%.
A near-term resolution to the Iran war could sour investor sentiment. But in the long term, defense companies will maintain revenue from government contracts. That’s reflected in the earnings growth expectations for each of these companies, with GE Aerospace's EPS forecast to grow by more than 16% over the following year, Northrop Grumman's by nearly 8%, and RTX’s by 10%.
For investors looking to use the post-earnings selloff as an entry point, NOC and RTX are currently trading at far more attractive forward P/E multiples of around 21 and 28, respectively.