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The Boeing Company (BA): Storm Before The Calm – Lowering Estimates Ahead Of New Master Schedule

The Boeing Company (BA) model was updated to account for slightly weaker-than-expected commercial aircraft deliveries and expected changes to 737 build rate increase targets over the next 18-24 months. We now forecast reduced 2H22 earnings potential for 2H22 after applying slightly more conservative BCA segment assumptions. However, the updated CY23-24 estimates remain firmly above consensus. Aircraft delivery projections were essentially pushed to the right due to supply chain factors but underlying demand for next-generation jets does not appear to be waning. Our positive thesis many have been confirmed last week after industry contacts shared some of the details expected to be included in new master production schedules. Continue reading

Tale Of The Tape: Carpenter Technology Versus Haynes International

Hello Fight Fans! Welcome to another “Tale of the Tape.” A unique report best described as another way for Tier4 Research to highlight areas of change, identified by proprietary channel checks, with a fresh look at the potential winners/losers selected from various peer groups. Today’s research undercard focuses on specialty materials, an underfollowed space exhibiting healthy trends and sequentially stronger survey data points. Do not be fooled. We are not talking about titanium, the product group that monopolized our research time and energy last month. This time we investigated the surprising nickel-based alloy market strength and bullish feedback offered by industry contacts in recent days. Companies within our coverage universe levered to upstream production seem ripe for outperformance and upward estimate revisions on robust demand/pricing undercurrents and incremental volume opportunities tied to PCC market share spillage. With that introduction out of the way, we are excited for the main bout which features two STRONG BUY rated contenders vying for the title of TOP PICK: Carpenter Technology (CRS) and Haynes International (HAYN). Continue reading

Specialty Materials: The PCC-SPMC Restructuring Effort Is Creating Quite A Nickel-Alloy Mess

We are hearing a lot of noise in the nickel-based alloys channel. Over the past few weeks, industry contacts: expressed new concerns about premium alloy supply shortages; have become even more frustrated with the domestic suppliers, notably PCP; and told us to brace for a crazy period of industry headlines and M&A. Our focus shifted to new PCP insights and confirmation of internal restructuring efforts. Continue reading

Specialty Materials: Filling In The Research Holes; Channel Focus On Titanium Supply Holes

You bet your afterburners the Tier4 Research team skipped a week of vacation for more time to explore the specialty materials channel and analyze unexpected data points. Our objective was filling holes left from last week, confirming contact expectations, and achieving a better understanding of possible supply scenarios or reason(s) behind a possible merger. We came away from a several contact discussions more convinced that changes are imminent within the titanium industry that should lead to a restart of idled upstream capacity located in the US. Now, we wait for the release of potential headlines (or game changing events)… Continue reading

Hot Take: We Sense A Great Disturbance In the Specialty Materials Space

A series of market tremors and immediate channel reaction this week led us to believe some type of major shake-up could be developing in the specialty materials space. In our 20+ years of coverage, we can comfortably say this may have been the noisiest day on record for titanium and our fearless research leader. We heard from several company executives positioned in the raw materials channel, premium alloy fabrication or forging subgroup, and titanium distribution complaining, in one form or another, about unusual mill actions: Continue reading