Elbit Systems (TASE:ESLT) Beats On Q2 And Backlog, Is The Upside Already Priced In?
Why Elbit Systems stock is back in focus after Q2 results and dividend news
Elbit Systems (TASE:ESLT) is drawing fresh attention after reporting second quarter 2026 results that beat analyst expectations and confirming a new US$1.00 per share dividend alongside a record US$32b order backlog.
See our latest analysis for Elbit Systems.
Despite the strong Q2 beat and dividend announcement, Elbit Systems has seen short term volatility, with the share price falling 10% over the past week. At the same time, a 25.2% year to date share price return and very large five year total shareholder return point to momentum that has built over a longer period as the market has reassessed both growth potential and risks around its expanding order book.
If this kind of defense demand story has your attention, it can be useful to see which other companies are benefiting from similar themes through the 39 robotics and automation stocks
After a sharp pullback despite strong Q2 figures, Elbit Systems now sits between a rich five year run and a record US$32b backlog. Does that balance of risk and potential still favour investors at today’s price?
Most Popular Narrative: 29.9% Undervalued
At a last close of ₪2,330.70 versus a narrative fair value of ₪3,324.07, Elbit Systems is framed as materially discounted, with that gap underpinned by specific growth drivers.
Record $25.2 billion backlog, with close to 70 percent from customers outside Israel and multi year contracts such as the 8 year, 2.3 billion dollar strategic program, provides high visibility on sustained top line growth and supports operating leverage and earnings compounding.
Want to see what kind of revenue trajectory and margin profile support this higher fair value? The narrative leans on multi year contract visibility and richer profitability assumptions that go well beyond headline backlog figures.
Result: Fair Value of ₪3,324.07 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are clear risks that could undercut this Elbit Systems upside story, including any pullback in defense budgets or setbacks on large, multiyear programs.
Find out about the key risks to this Elbit Systems narrative.
Another View: Elbit Systems and the cash flow debate
The first valuation story presents Elbit Systems as almost 30% undervalued based on analyst earnings projections and a relatively high future P/E. In contrast, Simply Wall St's DCF model prices the shares at ₪1,003.36, well below the current ₪2,330.70 level, which suggests an overvalued outcome under that measure. The question is which lens to rely on more when cash generation is placed at the centre.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Elbit Systems for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 251 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With Elbit Systems presenting both upside potential and clear risk flags, it makes sense to move quickly and pressure test the story against the numbers yourself through the 2 key rewards and 1 important warning sign.
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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.
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