Top 3 ASX Defence Stocks to Watch for Long-Term Growth

Last Updated on 21st September 2026

Australia’s defence sector continues to gain strategic importance, supported by rising defence spending. Take a look at three ASX-listed defence companies - CDA, EOS and ASB - and their recent performance for better understanding.

1. Austal Limited (ASX: ASB)

Austal Limited (ASX: ASB), on 9 September 2026, announced that it has received a non-binding indication of interest from Wildcat Infrastructure LLC to purchase Austal USA from Austal Limited.

The proposed aggregate enterprise value is US$1.25–1.35 billion, which is subject to due diligence and further negotiations. The deal is not final yet, and Austal will discuss the proposal.

FY26 Performance 

Earlier, on 31 August 2026, the company announced its full-year results, reflecting:

• Revenue growth of 11.3% to around $2 billion

• EBIT declined to a negative $125.2 million, mainly due to onerous shipbuilding contracts

• Order book remained strong at $16.5 billion

• Around six ships delivered in FY26

• 75 ships under construction or scheduled for construction

This provides greater revenue visibility for the coming years.

The company has a market capitalization of around $1.95 billion and has reported a record +$5 billion Australasian order book, comprising strategic shipbuilding agreements and increasing revenue visibility in Australia.

Outlook

Looking ahead, the company is focused on returning to profitability in FY27, with a target of doubling revenue in its Australasian business over the next five years.

It will also focus on continued shipbuilding progress and expanding capacity to meet increased demand in the coming years.

2. Electro Optic Systems Holdings Limited (ASX: EOS)

Electro Optic Systems Holdings Limited (ASX: EOS), on 25 August 2026, published its 1H FY26 results, which showcased strong growth.

Revenue increased by around 283%, from $44.1 million in the previous corresponding period to $168.8 million.

Gross margin stood at 58%, while underlying EBITDA turned positive at $21.6 million.

Orders and Strategic Developments

The company secured 10 orders worth $303 million during the half, with an unconditional order book of $846 million, reflecting strong performance during the period.

The company has a market capitalization of $2.29 billion and has opened a factory for high-energy laser weapons, while also acquiring MARSS in May 2026, with both developments representing strategically important investments for the company.

Outlook

Looking ahead, the company continues to pursue a number of material opportunities across different markets and has provided FY26 revenue guidance of $360–400 million.

If achieved, this would represent record revenue for the company, reflecting strong management confidence in the growth outlook.

3. Codan Limited (ASX: CDA)

Codan Limited (ASX: CDA), on 17 September 2026, announced its June-ending FY26 results, which reflects impressive growth.

Group revenue for the year increased by 30% compared to the previous year to $875 million.

EBITDA improved remarkably from $183.7 million in FY25 to $288.9 million in FY26, while NPAT also increased by 69% to $175.2 million.

Segment Performance

Both segments performed well:

• Communications order book increased by 50% to $380 million

• Metal Detection revenue reached $362 million, an increase of 42% compared with the previous year

The company has a market capitalization of around $9.13 billion and has recently paid a fully franked final dividend of 29 cents per share on 16 September 2026, totalling the full-year payout of 48.5 cents.

Outlook

Looking ahead, the company has set several objectives for FY27, including improving and expanding its omni-channel footprint in the Metal Detection segment, alongside continued product innovation.

In the Communications segment, the company will focus on expanding its market reach while continuing to develop and enhance its product offerings, positioning it well for further growth.

Source: Company Announcements