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Deutsche Bank Recommends The Boeing Company, General Dynamics Corporation And Rockwell Collins, Inc.

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Deutsche Bank Recommends The Boeing Company, General Dynamics Corporation And Rockwell Collins, Inc.
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As earning season slowly kicks in to gear, Myles Walton of Deutsche Bank previewed the Aerospace and Defense sector in a note to clients on Thursday.

Commercial aero stocks are down five percent year to date on average while defense stocks have risen 13 percent versus a 5-percent gain in the S&P 500, according to Walton.

Commercial stocks have “taken a pause” after last year's out-performance (51 percent versus 30 percent gain in the S&P 500) while defense stocks “continue to perform well.”

“We think the current breather being taken in commercial stocks is healthy, but will turn up post a better third quarter earnings season,” Walton wrote in his note. The analyst recommends buying shares of Boeing, (NYSE: BA) General Dynamics (NYSE: GD) and Rockwell Collins (NYSE: COL) heading in to the quarter.

Walton believes that commercial aerospace manufacturers will see double-digit year over year growth based on favorable data including IATA air traffic, and capacity and freight data hinting of improving conditions.

Walton expects most of the large-cap defense companies will demonstrate top-line growth in the third quarter and for the full fiscal year 2014. The analyst adds that the industry could benefit from an improved budget outlook, longer-term pension dynamics becoming “more well understood,” and shareholder-friendly cash deployments.

Earnings Estimates

  • Walton expects Boeing (Buy rated) will earn $2.05 in its third quarter results, seven cents above the consensus estimate.
  • Walton expects General Dynamics (Buy rated) will earn $1.98 in its third quarter results, eight cents above the consensus estimate.
  • Walton expects Rockwell Collins (Buy rated) will earn $1.29 in its third quarter results, two cents above the consensus estimate.

Latest Ratings for BA

DateFirmActionFromTo
Oct 2017BernsteinMaintainsOutperform
Oct 2017Canaccord GenuityMaintainsHold
Oct 2017Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for BA
View the Latest Analyst Ratings

Posted-In: aerospace Boeing commercial airlines general dynamics rockwell collinsAnalyst Color Analyst Ratings Trading Ideas Best of Benzinga

 

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