The Iran war is dragging on, and it's bad news for defense stocks that look overpriced and buried in debt despite booming weapons demand.

• The US burned through 14 years' worth of Tomahawk missiles in the first 30 days of the war and is now running low on Patriot and THAAD interceptors, so the Pentagon is pushing weapons makers to ramp up production fast.
• Raytheon (RTX) and Lockheed Martin are winning big new missile contracts, but both are loaded with far more debt than cash and carry weak profit margins.
• Both stocks look overpriced and overbought — hyped by the war rather than solid fundamentals, with big downside if the enthusiasm fades.
• Trump signed an executive order that can block these firms from paying dividends or buybacks unless they reinvest in factories, since he wants more weapons, not shareholder payouts.
• Peace looks far off: Iran is raising its demands, the Strait of Hormuz stays closed with ships still being attacked, and Israel's Netanyahu is pushing back hard against Trump's Gaza deal.

Outlook: The conflict likely lasts much longer, keeping oil in the $80s, adding to inflation, and possibly nudging the Fed toward higher rates.