Aerospace Industry Poised for Takeoff in 2025
As the aerospace and defense sector gears up for a strong 2025, Deutsche Bank analyst Scott Deuschle is bullish on the industry’s prospects. He has raised the firm’s price target on Boeing to $215 from $184, maintaining a Buy rating on the shares.
Boeing’s Production Momentum Gains Steam
The recent union strike has not dampened Boeing’s production momentum, with the company exiting the strike in a strong position. Additionally, an extensive buffer inventory of engines and clean fuselages will support the ramp-up in production. This, combined with improved engine availability from CFM International, a joint venture between GE Aerospace and Safran Aircraft Engine, is expected to drive demand for narrow-body aircraft at Airbus.
Deutsche Bank’s Top Picks
Within the commercial aerospace sector, Deutsche Bank favors Carpenter Technology and Howmet Aerospace, citing their attractive risk/reward profiles. However, if Boeing can sustain its operational momentum, its return outlook could be excellent as well. On the defense side, while Deutsche Bank likes the sector, it doesn’t love it.
Industry Outlook
As the aerospace and defense sector enters 2025, Deutsche Bank is optimistic about the industry’s prospects. With improving production momentum, extensive buffer inventory, and improved engine availability, the stage is set for a strong year ahead. As investors look to capitalize on this trend, top picks like Carpenter Technology and Howmet Aerospace are worth considering.
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