European A&D Radar: Weekly sector news, positioning data and research insights

研报英文原文证据摘录

European A&D Radar: Weekly sector news, positioning data and research insights

Goldman Sachs European A&D Radar

Our view

See our Q2 earnings preview here.

Aerospace

Aerospace stocks had a difficult week, falling mid-single digits as the re-escalation in

Iran drove a broader risk-off move. The weakness appeared predominantly macro-led,

rather than reflecting any deterioration in underlying sector fundamentals.

Airbus was the main company-specific focus following very strong June deliveries, which

materially improved the first-half run-rate and reinforced confidence that the

production ramp is gaining momentum. We saw significant investor interest in the name

with discussions increasingly focused on the forthcoming business update and what

Airbus might say. See our earnings preview (here) for our thoughts.

Our latest monthly report contained several notable operating datapoints: LEAP flying

hours remained strong at +18% year-on-year in June as the programme continues to

ramp, while CFM56 flying hours declined 10%, but retirements remain at low levels YTD.

Meanwhile, the number of parked PW1100G-powered aircraft fell by 45

month-on-month to 599, equivalent to c.29% of the fleet and down from a peak of

>35%.

Defence

The underlying Defence newsflow remained supportive, with more than $50bn of

procurement and industrial agreements announced at NATO’s Ankara summit. Specific

initiatives included a major NATO counter-drone programme, the planned joint

procurement of 10 Saab GlobalEye surveillance aircraft and new cooperation around

Airbus A400M strategic airlift and secure space-based communications.

Despite this, the macro backdrop continued to dominate sector performance. The

re-escalation in Iran prompted another sector derating, with investors showing limited