Shares of America’s two major public gun manufactures jumped over 5% in premarket trading and continued to rise Monday following Saturday's assassination attempt on former President Donald Trump. After years of record gun sales, ammunition makers appear particularly poised to take advantage of a potential rise in demand following the most serious attempt to assassinate a president or presidential candidate in over four decades.
At the time of publication, the stock price of Massachusetts-based gunmaker Smith & Wesson had risen over 11% from Friday’s close of $14.02, with prices briefly peaking above the $16 mark. Shares of Connecticut gun manufacturer Sturm, Ruger & Company initially surged over 10%, eventually trading about 6% up from its Friday close at $41.36.
A small-cap name in the gun industry also showed significant gains. Shares of ammunition and components maker Ammo. Inc, which also owns GunBroker.com, an online marketplace for firearms and shooting sports, had risen by over 12% from its Friday close.
Demand for ammunition may increase following record U.S. gun sales
Demand for firearms has previously surged after events like mass shootings due to fears from buyers of more stringent regulations, which has boosted stock prices and been followed by increases in ammunition sales. With Americans already having bought guns in record numbers over the last four years (over 75 million, according to an analysis of the FBI’s National Instant Criminal Background Check System by SafeHome.org), ammunition sales could jump considerably with so many firearms in people’s hands.
During the company’s latest earnings call, Ammo Inc. CEO Jared Smith boasted about increased sequential sales despite comparable revenue decreasing to $40.4 million from $43.7 million for the most recent quarter.
“We believe we have never been more poised for success,” Smith said.
Gun sales hit unprecedented highs in 2020 amidst the coronavirus pandemic and social upheaval following the murder of George Floyd. The stock prices of gun makers jumped accordingly, with shares of Ruger and Smith & Wesson hitting all-time highs approaching the $90 and $35 threshold, respectively.
The market appeared to bottom out by 2022 as sales fell to around 17.4 million total guns, down from almost 22.7 million during the pandemic, per SafeHome.org, but gun makers appear confident about future sales. In its latest earnings call, Smith & Wesson reported over $159 million in net sales, up almost 10% from the comparable quarter last year.
“While the summer months will be highly competitive as we navigate the traditionally slower season for firearms,” President and CEO Mark Smith said, “we continue to expect healthy demand overall for firearms in fiscal [year] 2025, and Smith & Wesson is well positioned to deliver another solid year of growth.”
Impact of presidential election on gun sales remains unclear
Gun sales have historically increased during presidential elections, Rommel Dionisio of Aegis Capital told CNBC in August. Despite fears about the particularly charged nature of this year's contest between Trump and President Joe Biden, some analysts who cover the gun industry believe the effect will be more muted this time around. With rhetoric surrounding gun control limited compared to previous election cycles, less Americans might be motivated to buy guns out of fear over potential bans.
Overall demand for firearms appears to be steady, however. In December 2023, Americans bought more than 1.7 million firearms, according to the National Shooting Sports Foundation, the 53rd consecutive month in which Americans had purchased over one million guns.
