2024-06-06 17:11:00 ET
Summary
- Aerospace & Defense stocks, including GE Aerospace, have outperformed the broader Industrials sector as a defense capex renaissance may be underway.
- GE Aerospace reported impressive Q1 results, with orders jumping to $11 billion, and shares are now up nearly 100% YoY.
- Despite strong earnings growth and a positive outlook, I see the current valuation as fair while share-price momentum has eased.
- Ahead of earnings next month, I outline key price levels to monitor.
The Industrials sector has taken a hit so far this quarter. The group helped lead large-cap US stocks from lows hit last October, but momentum in the Industrial Select Sector SPDR ETF (XLI) stalled as springtime got underway. But not all of the cyclical sector’s industries have struggled. Aerospace & Defense stocks have turned on the afterburners, with the Invesco Aerospace & Defense ETF (PPA) actually outperforming the S&P 500 Trust ETF (SPY) by a small margin year to date. Pushing the industry fund higher has been a massive 60% rally in shares of GE Aerospace (GE). ...
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GE Aerospace: Booking Gains After A Historic Rally, Downgrading To Hold