Wednesday December 8, 2021, 09:57:06

Aero Suppliers: The Global Supply Chain Could Be Facing More Bad 787 News

By Chris D. Olin

Indications from our latest aerospace channel checks suggests additional downside risk for global suppliers levered to the B787 aircraft program. Industry contacts now report growing demand headwinds associated with extended Dreamliner assembly lines halts and have started to reset 1H22 top-line expectations due to a slower-than-expected production recovery. This morning, we lowered estimates for the main companies in our coverage group to align with more conservative B787 build rate assumptions for CY22.formal issuance of strong LEAP jet engine production guidance. Both items should be considered bullish data points for the specialty materials and upstream aero supply peer groups, and the main drivers behind accelerated top-line growth and strong earnings contribution over the next 2-3 years. Continue reading

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Friday December 3, 2021, 11:17:19

Aero Suppliers: Investors Not Ready To LEAP To The MAX Following Release Of Positive Headlines?

By Chris D. Olin

We are surprised by the subdued response to the major aerospace industry headlines that were issued yesterday, including the long-awaited recertification of the 737 MAX for Chinese airspace and the formal issuance of strong LEAP jet engine production guidance. Both items should be considered bullish data points for the specialty materials and upstream aero supply peer groups, and the main drivers behind accelerated top-line growth and strong earnings contribution over the next 2-3 years. Continue reading

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Monday May 17, 2021, 06:53:14

Aerospace: Suppliers Are Reacting To The New LEAP Production Targets

By Chris D. Olin

General Electric (GE) held a conference call with its major suppliers to review all details behind the newly implemented LEAP production schedule and to ensure supply chain alertness. Last week, the company effectively raised the CY22 production outlook to 360-370 engines to account for stronger single-aisle aircraft build rates. This was the third major scheduling adjustment announced by the aircraft OEMs and jet engine suppliers, which suggests an upward bias to CY22-23 expectations for the coverage group. Continue reading

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