Elbit Systems (TASE:ESLT) is drawing serious investor attention after landing a major international contract worth around $2.3 billion. The deal, which spans eight years, boosts the company’s revenue visibility and positions it strongly among global defense players.
See our latest analysis for Elbit Systems.
On the heels of this landmark contract, Elbit Systems’ share price has powered higher, fueled by record earnings, a fresh dividend, and talk of future U.S. acquisitions. All these factors reflect growing confidence in its long-term outlook. Momentum is undeniable, with a year-to-date share price return of nearly 74%, and the one-year total shareholder return is an impressive 80%.
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After such a strong run, investors face a key question: Is Elbit Systems still trading below its true value, or has all of its future growth already been factored into the stock price?
Elbit Systems currently trades at a price-to-earnings (P/E) ratio of 59.2x, a notable premium over both its industry peers and the broader market. This elevated figure places the company at the higher end of valuation bands for the defense sector.
The P/E ratio shows how much investors are willing to pay for each shekel of the company’s earnings. For a business like Elbit Systems, which has recently delivered strong earnings growth, a higher P/E can reflect expectations for sustained outperformance. However, ratios at this level may also indicate that future earnings growth is already reflected in the current price.
Looking at the numbers, Elbit’s P/E ratio is well above the Asian Aerospace & Defense industry average of 55.6x and the average of its direct peers at 43.2x. This suggests that, despite strong recent performance, the market currently values Elbit at a substantial premium.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 59.2x (OVERVALUED)
However, any slowdown in revenue growth or a dip in net income momentum could quickly dampen investor sentiment and challenge Elbit Systems’ high valuation.
Find out about the key risks to this Elbit Systems narrative.
Taking a different approach, our DCF model suggests Elbit Systems might be trading far above its fair value. Shares are at ₪1665 compared to an intrinsic value estimate of just ₪1034.4. This presents a very different angle and hints at potential downside risk if market enthusiasm cools. Which scenario will ultimately play out?
Look into how the SWS DCF model arrives at its fair value.
ESLT Discounted Cash Flow as at Nov 2025
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A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Elbit Systems.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ESLT.TA.
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