Boeing and 10 More Buys for the 'Modern-Day Industrial Revolution'

Dow Jones
4小时前

The aerospace & defense industry is a winner in the age of AI, says Barclays. The broker has 11 buy recommendations for investors.

Analyst Anthony Valentini launched coverage of 20 aerospace and defense stocks on Thursday with a positive view of the sector.

"The US is in the early innings of a modern-day industrial revolution," wrote Valentini. "Technology is accelerating at a faster pace than the World has ever seen. The U.S. is setting the pace on AI innovation... Aerospace & defense is quietly leading the way."

Commercial aerospace players can use technology to boost efficiency without fearing disruption. The Pentagon is also hungry for leading-edge technology to maintain U.S. military hegemony.

In the defense sector, Valentini prefers new technology to traditional prime contractors. In aerospace, he wants to own high-quality companies. In the emerging space industry, Valentini prefers vertically integrated players that can launch things into space and operate satellites.

His defense buy recommendations are: drone and rocket parts suppliers Kratos Defense & Security Solutions and Karman. AI software company Palantir Technologies is another Buy-rated name.

In Aerospace, Valentini likes engine maker RTX, Boeing, flight training company CAE, and parts caster DPC. Electric vertical takeoff and landing aircraft companies Archer Aviation and Beta Technologies are two more Buy-rated names.

In space, SpaceX is a favorite, along with mini-SpaceX Rocket Lab. SpaceX is the world's dominant launch provider, which operates a huge constellation of communications satellites. Rocket Lab essentially mimics SpaceX, but at a much smaller scale.

Both of those are popular stocks with his peers. About 75% of analysts covering SpaceX stock rate shares Buy and 85% rate Rocket Lab Buy. The average Buy-rating ratio for S&P 500 stocks typically ranges from 55% to 60%.

His Rocket Lab price target is $85. Rocket Lab stock was a recent $73. His SpaceX target is $254, up substantially from a recent $171.

Valentini's aerospace picks all have above-average Buy-rating ratios. His price target for Boeing is $300, up from a recent $190. His price target for RTX is $223, up from a recent $184. His targets for DPC and CAE are $49 and $38, respectively. DPC was recently $41; CAE was $24.

His targets for eVTOL companies Beta and Archer are $35 and $8, respectively. Beta was recently $21; Archer stock was recently $4.75.

Valentini's defense picks all have above-average Buy-rating ratios. Karman is perfect, with all 14 analysts covering it rating its shares Buy. His Karman price target is $79, up substantially from a recent $33. His Kratos target is $90, up substantially from a recent $42.

Defense stocks have been weak since the Iran War began, with investors fearing contract reform at the Pentagon and spending gridlock if Democrats retake the House in midterm elections. Heading into Friday trading, Kratos and Karman shares were down 51% and 64%, respectively, since fighting began.

His Palantir target is $265, up from a recent $200.

It's a lot to digest. The message is simple, though: Aerospace offers opportunity at current levels.

 

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