2Q26 A&D Earnings Preview

Research evidence excerpt

2Q26 A&D Earnings Preview

Aerospace & Defense

Aerospace - Market Overweight

Defense - Market Overweight

Space - Market Weight

2Q26 A&D Earnings Preview July 8, 2026

We like EMBJ, CR, HWM, TDG and GD into 2Q results

The Wolfe Byte

Clear skies in 2Q for Aero while Defense remains under clouds of budget uncertainty and evolving priorities. Into 2Q

results, we like EMBJ, CR, HWM, TDG and GD with investors re-engaged with Aero and fence-sitting in Defense.

Aerospace & Defense 2Q Earnings Preview

A&D 2Q EPS kick off the week of Jul 13th (full schedule inside). 2Q was a tale of dispersion with Space & Aerospace

flying higher (up ~30% and ~20% respectively on avg) while defense stocks were largely under pressure, falling ~10%

on avg. Aero stocks climbed higher all Q while Space rocketed up in May but had tough June and defense basically

lagged all Q. Into 2Q, we tactically like EMBJ, CR, HWM, TDG and GD. Based on our buy-side sentiment survey (see

inside), favorite longs for the Q are: CW, GD, ARXS in Defense, and HWM, RTX, ATI, BA in Aero. We'd also note the

record low sentiment in Defense and sharp positive sentiment reversal in Aero.

Aerospace: Falling capacity not enough to alter supply-demand imbalance...expect another Q of strong results

War, what war? 2Q results are unlikely to be blemished by the pullback in flying seen over the last month, which

furthers the thesis that the supply-side limitations of commercial aerospace are driving the current financials vs.

demand. GE will kick-off earnings with an expected strong beat-and-raise to set the right tone. We expect lots of

good prints, but take note of opportunity in EMBJ (much better mix, tariff relief, strong orders), CR (beat and raise with