1029 GMT - Concerns over the impact on U.S. defense stock of the budget efficiency drive announced by U.S. President Donald Trump are "likely overdone", Citi analysts say. U.S. defense stocks have declined as much as 25% since Trump's victory but recent remarks regarding his desire to exert U.S. control over Greenland and Panama canal suggest he isn't an isolationist, the analysts say. The efforts by the U.S. Department of Government Efficiency to reduce the Federal workforce could end up driving more business to the contractors, they argue. Citi upgrades Northrop Grumman and RTX Corporation to buy from neutral, noting that investors have become too cautious on the outlook for defense spending. Citi expects defense contractors to make positive comments on demand from Europe, while striking a note of caution on the U.S. during its presidential transition. (cristina.gallardo@wsj.com)

(END) Dow Jones Newswires

January 21, 2025 05:30 ET (10:30 GMT)

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