Teledyne Technologies ( NYSE: TDY ) and CAE ( NYSE: CAE ) on Monday were upgraded by analysts at Morgan Stanley in its optimistic outlook for the aerospace industry as travel rebounds worldwide.
The investment bank raised the ratings CAE ( CAE ) and Crane Holdings ( NYSE: CR ) to Overweight from Equal weight. It also upped Teledyne Technologies ( TDY ) to Equal weight from Underweight previously.
Its report also included several downgrades such as Curtiss-Wright ( NYSE: CW ) and Heico Holdings ( NYSE: HEI ) to Equal weight from Overweight, and Moog ( NYSE: MOG.A ) to Underweight from Equal weight.
“We remain bullish on the continued aerospace recovery in 2023,” Kristine T. Liwag, analyst at Morgan Stanley, said in the Dec. 12 report. “Global air traffic is now at about 75% of pre-COVID-19 levels as of September 2022. Full normalization is likely in 2023 as China re-opens.”
As supply-chain constraints continue to ease next year, a variety of suppliers of parts and machinery to Boeing ( BA ) and Airbus ( OTCPK:EADSF ) – the two biggest makers of commercial planes -- are likely to benefit from efforts by airlines to expand their fleets and replace older planes.
“The duopolistic nature of aerospace and shortage of aircraft assets (supply chain constraints and limited availability of aircraft slots through 2027) makes aerospace defensive in a period of macroeconomic risks,” according to Morgan Stanley.
Morgan Stanley's rating changes for aerospace industry, Dec. 12 | ||
New rating | Old rating | |
CAE Inc. ( CAE ) | Overweight | Equal weight |
Crane Holdings Co. ( CR ) | Overweight | Equal weight |
Teledyne Technologies Inc. ( TDY ) | Equal weight | Underweight |
Heico Corp. ( HEI ) | Equal weight | Overweight |
Curtiss-Wright Corp. ( CW ) | Equal weight | Overweight |
Moog Inc. ( MOG.A ) | Underweight | Equal weight |
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Teledyne, CAE upgraded as Morgan Stanley re-rates aerospace industry