Smith & Wesson gun sales soar as Obama announces gun rules

Smith & Wesson shares have surged for the second day Tuesday, driven higher by new gun control measures announced by President Obama.

Shares in the nation’s other big listed gun company, Sturm, Ruger & Company, rose by 7.4% to $66.

Gunmakers had been trading up Tuesday and received an additional boost following President Barack Obama’s mid-day speech on gun control.

Gun sales in December surged as the discussion of restrictions on weapons sales heated up following the San Bernardino, California terrorist shooting that killed 14 people.

Following the NICS data and increased outlook from Smith & Wesson, BB&T Capital Markets analyst Brian Ruttenbur upgraded his rating on Smith & Wesson shares to “buy” from “hold” and raised his price target on Ruger shares to $70 from $63.

The stock has been leading the rally among the equities of US gun manufacturers ahead of the announcement of President Obama’s plans to prevent gun-related violence. But for committed gun owners, high-profile mass shootings, and the calls for new gun regulations that they inspire, provide ample motivation for increasing stockpiles.

News of the firearm marketplace that was more powerful found Smith & Wesson’s shares up 11 despite stock markets in general dropping dramatically.

The expanded background checks will likely not affect the average person buying a gun. Smith & Wesson shares finished Monday at 5.9 percent higher. In addition, the Federal Bureau of Investigation will hire more than 230 additional National Instant Criminal Background Check System examiners to process the background checks, an increase of 50%. Smith & Wesson confirmed in a press release that demand has shot through the roof since Obama took office in 2009.

In announcing its quarterly results, Smith & Wesson said in a statement that “the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms”.

For the third quarter, ending January 31, Smith & Wesson raised its expectations from $175 million to $180 million in net sales. The company recently sold its millionth M&P Shield, making it the best-selling personal protection and self-defense pistol today.