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Wednesday August 3, 2022, 02:34:18

Aerospace: Airbus Provides New Production Schedule To Major Suppliers

By Chris D. Olin

We expect minimal supply chain fallout following the production audible called by Airbus last week. Adjustments to the master schedule appear to be fairly modest, while more importantly, the management team is holding to its aggressive long-term single-aisle aircraft production strategy. We also believe lost A320 volume could be partially offset by upward movement in wide-body build rates given recently collected channel intel. Bottomline, the updated Airbus production forecasts account for: the conservative corporate guidance; details included in the aircraft program update; and other updates/commentary offered by aerospace industry bellwethers. Continue reading

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Tuesday July 12, 2022, 05:32:27

Specialty Materials: Titanium Prices Moving Higher But Rising Input Costs Could Limit Margin Opportunity

By Chris D. Olin

We are focused on the visible titanium channel strength and recent surge in spot prices for all semi-finished and finished mill product groups. The combination of volume strength, higher price points and favorable contract resets should facilitate solid top-line growth for this business and the premium alloys group. That said, we see incremental margin risk associated with upward titanium scrap price movement and preliminary outlook for CY23 sponge contracts. Our analysis of the titanium market data suggests ATI Incorporated (ATI) may need to reconsider restarting one of the idled sponge-making facilities. Continue reading

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Friday July 8, 2022, 06:48:59

Aerospace: Airbus Is Sticking With Its Aggressive Aircraft Production Strategy

By Chris D. Olin

Airbus recently sent updated commercial aircraft product schedules to all major suppliers that may contain information likely to become a much-needed catalyst for the aerospace peer group. Contrary to the negative quarterly updates issued by companies levered to aerospace or other industries, the Airbus outlook appears to be holding (for the year and beyond). Surprisingly, the management team refrained from lowering build rate targets to account for macro weakness or global supply chain bottlenecks Continue reading

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Thursday June 16, 2022, 05:21:53

Specialty Materials: Highlighting Unexpected Titanium Market Strength

By Chris D. Olin

We updated our titanium market forecasts to account for better-than-expected survey results and positive macro events. Changes to the model include: upward global demand growth revisions for CY22; increased spot market pricing assumptions; and expected market share gains for titanium suppliers based in North America. Bottom-line, titanium could become a bright spot for the highly-levered names ahead of expectations, potential driving accelerated top-line growth for peers like Allegheny Technologies (ATI) and Howmet Aerospace (HWM). Continue reading

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