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

By Chris D. Olin Published on December 3, 2021 at 11:17 AM

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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Buzzing The Tower: Mid-June Update

By Chris D. Olin Published on June 13, 2021 at 10:12 PM

Tower… Requesting permission to release Buzzing The Tower – A high-speed flyby fully armed with research note summaries, a sampling of interesting quotes collected from the channel, and industry headlines that can be enjoyed with a morning coffee. Admittedly, we deployed the initial review later than planned and Viper is incensed. We had a minor setback after getting caught in Iceman’s jet wash again, but that will never happen again. Going forward, we plan to release a new update near the start of every other weekend and then hop into some blue jeans for another beach volleyball match… Continue reading

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Aerospace: Upgrading Upstream Suppliers On Stronger Aero Sales Outlook And Potential Bottleneck Benefits

By Chris D. Olin Published on June 4, 2021 at 8:28 AM

We are making a rotational call within the aerospace coverage group, now favoring upstream suppliers that appear to be positioned to benefit from a changing commercial aircraft production environment. The investor narrative may shift to the premium forgers and/or specialty materials providers earlier-than-expected as the supply chain readies for a sharp inflection in demand for 737MAX or A320neo applications, looking beyond negative near-term earnings expectations. As such, we are changing ratings on a few companies that fit into that description. Today, we are formally upgrading Hexcel Corporation (HXL) and Haynes International (HAYN) to Strong Buy investment ratings and moving Allegheny Technologies (ATI) over to Outperform. We had previously rated all three Hold. Continue reading

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