2023-04-14 17:17:00 ET
For entirely different reasons, the aerospace and defense markets are looking good in the near and long term. Moreover, stocks like Raytheon Technologies (NYSE: RTX) and lesser-known companies like Moog (NYSE: MOG.A) (NYSE: MOG.B) and Woodward (NASDAQ: WWD) look like a good value now. To appreciate why, it's essential to understand some of the underlying dynamics in the industry. Here's the lowdown.
Aerospace is usually split into two end markets: the original equipment manufacturer (OEM) market and the aftermarket. Both markets are in growth mode.
Aircraft production rates drive the OEM market at companies like Boeing and Airbus --both striving to ramp aircraft production and deliver on multiyear backlogs. For example, Boeing plans to ramp up production of its 737 MAX (3,653 planes in backlog at the end of 2022) from 31 per month at present to 50 per month in the 2025/2026 time frame. Meanwhile, Airbus plans to hit a production rate of 50 per month on its A320neo family aircraft leading to 65 per month by the end of 2024.
For further details see:
3 Hot Aerospace Stocks That Are Screaming Buys