- Boeing (BA -3.4%) and Spirit AeroSystems (SPR -2.8%) should rebound despite concerns over emerging market demand, J.P. Morgan analysts say, expecting aircraft production to increase even with growing concerns about demand from emerging markets.
- While noting macro factors such as lower GDP growth and the risk of a recession, the firm attributes its confidence in the aerospace sector to large OEMs, diverse backlogs, solid traffic growth and fewer cancellations.
- "Since China is at the center of today’s worries, we have looked closely at the backlog, concluding that order levels are reasonable and leading airlines should take their planes barring a very hard landing. If the cycle holds as we expect, aero stocks should rebound," the firm writes.