In its mid-year aerospace/defence update, Credit Suisse First Boston (CSFB) reiterated that the defence industry is at the beginning of a "once-in-a-generation, long-term uptick in US defence spending". CSFB analysts maintain that this is the best government-business ― environment for the defence industry in three decades. Conversely, there has been no growth in European defence budgets, which produces a valuation gap between US and European defence equities -with European defence stocks valued around 20% to 30% lower than their US peers. However, CSFB says that European defence stocks will have to follow US growth, which could be a driver for European defence stocks in 2002 after their underperformance in 2001.
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