Barclays on Industrials: Mid-Cycle Update - Why it's Not Time to Sell Just Yet
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Price: $127.48 --0%
Rating Summary:
2 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
2 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Barclays on Industrials: Mid-Cycle Update - Why it's Not Time to Sell Just Yet...
Barclays analyst says, "At least once a year, we provide a regular update to our views on Aircraft Supply and Demand. This regular analysis is where all of our thoughts on traffic, aircraft parking and retirements, utilization, and forecast deliveries come together. We view supply/demand factors, not orders, as our primary tool to evaluate the strength of the cycle, and although the bullish conclusions we drew last year were somewhat controversial, this year the aerospace upturn is a consensus call in our view. However, even with share prices up ~3x off the bottom (consistent with prior peak prices), this year we want to remind investors that we think further outperformance lies ahead. With multiples largely in the middle of historical ranges, and with most aerospace companies forecast to double EPS over the next 3-4 years, we think the risk/reward in aerospace is a favorable one."
"Our favorites in the group include Goodrich (NYSE: GR) (strong fundamentals, potential upside to estimates, down YTD), and Spirit Aerosystems (NYSE: SPR) (steep discount to peers ahead of cyclical upturn and CF improvements) in the US, and RR and SAF (strong multi-year EPS growth forecast, lagging YTD performance, undemanding valuations) in Europe. We've made modest EPS changes across our coverage universe based on an assumed Boeing (NYSE: BA) 737 rate increase to 42/month in 2014. Our ratings are unchanged."
Other stocks of note: Rockwell Collins (NYSE: COL) and TransDigm (NYSE: TDG)
Barclays analyst says, "At least once a year, we provide a regular update to our views on Aircraft Supply and Demand. This regular analysis is where all of our thoughts on traffic, aircraft parking and retirements, utilization, and forecast deliveries come together. We view supply/demand factors, not orders, as our primary tool to evaluate the strength of the cycle, and although the bullish conclusions we drew last year were somewhat controversial, this year the aerospace upturn is a consensus call in our view. However, even with share prices up ~3x off the bottom (consistent with prior peak prices), this year we want to remind investors that we think further outperformance lies ahead. With multiples largely in the middle of historical ranges, and with most aerospace companies forecast to double EPS over the next 3-4 years, we think the risk/reward in aerospace is a favorable one."
"Our favorites in the group include Goodrich (NYSE: GR) (strong fundamentals, potential upside to estimates, down YTD), and Spirit Aerosystems (NYSE: SPR) (steep discount to peers ahead of cyclical upturn and CF improvements) in the US, and RR and SAF (strong multi-year EPS growth forecast, lagging YTD performance, undemanding valuations) in Europe. We've made modest EPS changes across our coverage universe based on an assumed Boeing (NYSE: BA) 737 rate increase to 42/month in 2014. Our ratings are unchanged."
Other stocks of note: Rockwell Collins (NYSE: COL) and TransDigm (NYSE: TDG)
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