US Aerospace & Defense: From A to D - Is Defense back?

研报英文原文证据摘录

US Aerospace & Defense: From A to D - Is Defense back?

Global Research

27 July 2026ab

US Aerospace & Defense Equities

AmericasFrom A to D - Is Defense back?

Aerospace

Gavin Parsons

We expect strong results across most of our coverage Analyst

In our weekly note, we summarize top topics, notes we've published, MAX/787 gavin.parsons@ubs.com

tracking, and more. +1-212-713 2389

Joao Santos Top topics / sentiment / most discussed: Defense stocks had a big move higher

Associate Analyst

last week on strong earnings results combined with light positioning. With joao.santos@ubs.com

investor inbound the highest it has been on the subsector in months, we take +1-212-713 1437

another look at the very same question we asked in early June: "what to do with

Nicholas Labbadia

Defense stocks".

Sentiment on Defense has remained generally bearish with the two concerns nicholas.labbadia@ubs.com

we hear most frequently being 1) budget/politics and 2) earnings/cash +1-212-713 5573

conversion. On the first, it may take getting past the midterms and seeing some

true bipartisan support for national security. On the second, it will take a track

record of no charges and revenue dropping through to earnings/cash, a

dynamic that held back the group in the early/mid 2020s. LMT raised

FCF guidance and NOC has line of sight to reintroduce its multi-year outlook

with 3Q - both a good start - but thus far we have not gotten the sense that

earnings alone are enough to convince investors Defense is back. We expect

the group to remain debated, with more interest and less apathy. The group

trades at a slight premium to the S&P500 - and while valuation historically

tracks budget rate of change, we believe it will be harder to ignore / de-rate