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U.S. Aerospace & Defense Industry Analysis

UpdatedAug 17, 2022
DataAggregated Company Financials
Companies80
  • 7D3.9%
  • 3M5.6%
  • 1Y10.1%
  • YTD11.9%

In the last week, the Aerospace & Defense industry is up 4.6%, with Raytheon Technologies leading the way with a 3.4% gain. During this same period, the Vertical Aerospace underperformed, falling 11%. This takes the industry's 12 month performance to a gain of 9.7%. Earnings are forecast to grow by 13% annually.

Industry Valuation and Performance

Has the U.S. Aerospace & Defense Industry valuation changed over the past few years?

DateMarket CapRevenueEarningsPEAbsolute PEPS
Wed, 17 Aug 2022US$578.9bUS$280.5bUS$21.6b24x26.7x2.1x
Fri, 15 Jul 2022US$537.6bUS$285.6bUS$22.4b19x24x1.9x
Sun, 12 Jun 2022US$559.4bUS$284.8bUS$22.4b19.8x25x2x
Tue, 10 May 2022US$571.0bUS$284.6bUS$21.4b21x26.7x2x
Thu, 07 Apr 2022US$594.9bUS$285.3bUS$22.5b22.3x26.5x2.1x
Sat, 05 Mar 2022US$600.5bUS$287.6bUS$22.6b21.3x26.5x2.1x
Mon, 31 Jan 2022US$520.6bUS$285.3bUS$21.9b19.5x23.8x1.8x
Wed, 29 Dec 2021US$516.8bUS$286.0bUS$18.8b19.1x27.5x1.8x
Fri, 26 Nov 2021US$517.6bUS$286.3bUS$18.8b18.8x27.5x1.8x
Sun, 24 Oct 2021US$550.2bUS$284.5bUS$19.8b20.6x27.8x1.9x
Tue, 21 Sep 2021US$503.7bUS$284.4bUS$20.1b20.5x25.1x1.8x
Thu, 19 Aug 2021US$502.6bUS$284.4bUS$20.1b19.8x25x1.8x
Thu, 03 Jun 2021US$524.9bUS$276.7bUS$14.2b29.4x36.9x1.9x
Sun, 07 Mar 2021US$453.5bUS$274.4bUS$12.0b32x37.8x1.7x
Wed, 09 Dec 2020US$445.0bUS$275.1bUS$12.4b28.7x35.8x1.6x
Tue, 01 Sep 2020US$425.3bUS$272.9bUS$13.7b23.8x31.1x1.6x
Fri, 05 Jun 2020US$428.8bUS$269.2bUS$19.8b22x21.7x1.6x
Mon, 09 Mar 2020US$459.9bUS$263.0bUS$21.0b18.1x21.9x1.7x
Sun, 01 Dec 2019US$497.0bUS$254.6bUS$20.5b21.1x24.3x2x
Wed, 04 Sep 2019US$483.1bUS$256.0bUS$21.1b20.5x22.9x1.9x
Price to Earnings Ratio

22.9x


Total Market Cap: US$483.1bTotal Earnings: US$21.1bTotal Revenue: US$256.0bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Aerospace & Defense Industry Price to Earnings3Y Average 27.7x202020212022
Current Industry PE
  • Investors are relatively neutral on the American Aerospace & Defense industry at the moment, indicating that they anticipate long term growth rates to remain steady.
  • The industry is trading close to its 3-year average PE ratio of 27.7x.
  • The 3-year average PS ratio of 1.8x is lower than the industry's current PS ratio of 2.0x.
Past Earnings Growth
  • The earnings for companies in the Aerospace & Defense industry have remained mostly flat over the last three years.
  • Meanwhile revenues for these companies have grown 3.1% per year.
  • This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased and as a result, profits have held steady.

Industry Trends

Which industries have driven the changes within the U.S. Industrials industry?

US Market4.53%
Industrials5.09%
Aerospace & Defense3.92%
Aerospace and Defense3.92%
Industry PE
  • Investors are most optimistic about the Aerospace and Defense industry, which is trading close to its 3-year average PE ratio of 22.2x.
  • Analysts are expecting annual earnings growth of 13%, which is lower than the prior year's growth of 25% per year. So the market might believe that analysts are underestimating future growth.
Forecasted Growth
  • Analysts are most optimistic on the Aerospace and Defense industry, expecting annual earnings growth of 13% over the next 5 years.
  • However this is lower than its past earnings growth rate of 25% per year.

    Top Stock Gainers and Losers

    Which companies have driven the market over the last 7 days?

    CompanyLast Price7D1YValuation
    RTX Raytheon TechnologiesUS$95.053.4%
    +US$4.6b
    9.7%PE31.1x
    BA BoeingUS$172.084.4%
    +US$4.3b
    -22.6%PS1.7x
    GD General DynamicsUS$241.486.1%
    +US$3.8b
    21.2%PE20x
    LMT Lockheed MartinUS$440.162.7%
    +US$3.1b
    21.7%PE24.8x
    NOC Northrop GrummanUS$485.502.5%
    +US$1.8b
    31.7%PE13.2x
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    Latest News

    BA

    US$172.08

    Boeing

    7D

    4.4%

    1Y

    -22.6%
    Aug 16

    Boeing Stock Surges, Deliveries Tumble

    Boeing saw meaningful support for the Boeing 737 MAX 10 in July. Low aircraft delivery numbers are disappointing but not completely unexpected. While airplane delivery figures are low, there is a lot to be excited about for Boeing investors. Last month Boeing (BA) stock prices surged as the US jet maker posted delivery figures at the highest level since March 2019 and that positive momentum continued. Share prices continued to increase and are now trading 20% higher compared to the time of publishing the June orders and delivery numbers. In this report, I will have a look at the orders, deliveries, cancellations and other book adjustments for the month of July. For this I use the TAF Boeing Orders and Deliveries monitor developed by The Aerospace Forum. Each month, I provide an update on the order activity for Boeing and Airbus (EADSF) (EADSY). I do this on a monthly basis as that's the smallest timescale on which it's possible to extract useful data on orders, deliveries and cancellations. Using this timescale, we're able to more accurately detect trends and inform readers. Big Momentum For Big Boeing 737 MAX Boeing Commercial Airplane orders July 2022 (The Aerospace Forum) During the month, Boeing received a total of 130 orders consisting of 127 single-aisle orders and three wide-body orders marking a sequential increase of 80 units: Delta Air Lines (DAL) ordered 100 Boeing 737 MAX 10 aircraft. Qatar Airways ordered 25 Boeing 737 MAX 10 aircraft. American Airlines (AAL) ordered two Boeing 737 MAX aircraft. Air Canada (ACDVF) ordered two Boeing 777Fs. FedEx Express (FDX) ordered one Boeing 777F. The following changes were made to the order book: Air Lease Corporation was identified as the customer for one Boeing 737 MAX. ANA Holdings was identified as the customer for 20 Boeing 737 MAX aircraft. A/S Maersk Aviation Holdings was identified as the customer for one Boeing 767-300F. Nineteen orders for the Boeing 777X were transferred from ANA Holdings to All Nippon Airways. BOC Aviation cancelled orders for three Boeing 787-9s. CES Leasing Corporation was identified as the customer for two Boeing 777Fs. ICBC Leasing was identified as the customer for two Boeing 737 MAX aircraft. Lynx Air was identified as the customer for 29 Boeing 737 MAX aircraft. Minsheng Leasing was identified as the customer for 14 Boeing 737 MAX Aircraft. Southwest Airlines was identified as the customer for four Boeing 737 MAX aircraft. An unidentified customer cancelled orders for one Boeing 737 MAX. Boeing 737 MAX 10 Delta Air Lines (Delta Air Lines) July was definitely the month of the Boeing 737 MAX and more particularly the biggest variant of the MAX 10, which faces some regulatory hurdles. With big orders from Delta Air Lines and Qatar Airways for the Boeing 737 MAX placed during the airshow, Boeing saw support for the biggest member of the MAX family. Interesting to note is that the order announcements from the Farnborough Airshow would suggest that 160 orders would be added to the books, but less were added during the month. We traded the shortfall back to absence of the order announcements from 777 Partners for 30 Boeing 737 MAX 200s and 5 orders from AerCap (AER) for the Boeing 787-9. It could be that some elements of the contracts still need to be finalized before Boeing can add them to the backlog. For example, from the AerCap deal it is known that the deal was set up and announced in less than 24 hours with a simultaneous agreement to place the aircraft with a customer. Besides the orders announced at the Farnborough Airshow, Boeing logged orders for three Boeing 777Fs demonstrating the strength of that platform on the freighter market. In July, Boeing's orders were heavily tilted toward the Boeing 737 MAX which should not come as a surprise keeping in mind the continued delays on the wide body programs and the differences in demand recovery between single aisle focused markets and wide body focused markets. An uptick in widebody orders might come once Boeing has its programs better aligned to serve customers on a more reliable timeframe and the first steps for that are set with the resumption of Boeing 787 deliveries. In the order book, we also saw some changes as BOC Aviation cancelled orders for three Boeing 787-9s and an unidentified customer cancelled orders for one Boeing 737 MAX, while a flurry of customers was identified including Lynx Air, All Nippon Airways and Minsheng Leasing. During the month, Boeing received 130 orders and 4 cancellations, bringing its net order tally to 126 orders valued at $6.6 billion. In the same month last year, Boeing received 31 orders but had to scratch 17 orders from the books, bringing its net orders to 14 units valued at $1.6 billion. So, year-over-year, the net orders were increased driven by lower cancellations and the Delta Air Lines order for the Boeing 737 MAX 10. Year-to-date, Boeing received 416 orders and 104 cancellations, bringing its net orders to 312 units valued $20.5 billion. In comparison, last year, Boeing booked 630 orders and 373 cancellations, bringing its net orders to 257 units valued at $19.6 billion. The numbers show that gross order inflow has declined and cancellations have improved, resulting in an 18% decline in net orders and a 5% increase in base value for the aircraft. Interesting to note is that net orders have significantly increased, but the value of the orders is slightly higher but not to the same extent driven by the Boeing 767 platform sales for the USAF tanker program. Boeing also updated its ASC606 adjustments tally, which is a tally in which Boeing lumps orders that have a purchase agreement but also several other check boxes that need to be ticked in order to count the aircraft orders to the backlog or not. During the month, we saw the tally decrease by 31 units. This was primarily driven by the orders some orders previously earmarked as doubtful to be filled now being added back to the backlog. If all ASC 606 adjustments result in cancellations, which definitely is not always the case, Boeing would have to scratch an additional 836 aircraft from its books. Boeing's Aircraft Deliveries Tumble Boeing commercial aircraft deliveries July 2022 (The Aerospace Forum) Month-over-month Boeing's delivery numbers dropped from 51 units to 26 aircraft, valued at $3.2 billion consisting of 44 single-aisle aircraft and seven wide-body aircraft: Boeing delivered 23 Boeing 737s, all of which were for the Boeing 737 MAX. Boeing delivered two Boeing 767-300Fs. Boeing delivered one Boeing 777F. There were no deliveries for the Boeing 747 program. There were no deliveries for the Boeing 787 program.

    ASLE

    US$19.83

    AerSale

    7D

    -0.9%

    1Y

    51.1%
    Aug 15

    On 1,000 Seeking Alpha Articles

    Evergreen Articles. Best Ideas. Readers react. Thank you, David Jackson and Seeking Alpha, for publishing my articles over the past decade. On your site, I met a future colleague, launched Sifting the World, disclosed billions of dollars of trades, went activist on three banks (two of which subsequently sold at premiums), and twice offered million dollar bets that I would have won (politely rejected by Warren Buffett and ignored by Kathie Wood). Because I focus on M&A, most of my winners have been bought and delisted. The old saw about value investing is that it is buying $1 for $0.50; I add the caveat that I want to know when I’ll get that dollar. So, only a few of my ideas are timeless, but here are four worth looking back on. Evergreen Articles Texas Hold 'Em Tournaments And Value Investing It can be lucrative to know how to detect deception. Poker and investing are both about decisions amidst risk and uncertainty, played out in real time. Liquidity-constrained counterparties make the best opponents. 8 Steps To Secure Your Financial Future Recently, a decorated veteran asked for my help in thinking about his transition to civilian life. Here are the eight steps that I recommended in financially planning for civilian life. Anyone could take advantage of each of these eight steps. Sifting The World Launched -- Exclusive Research From Chris DeMuth Jr Sifting the World is an exclusive research service for value and event driven investors. The membership window is open and will close once there are 1,000 members. The goal is to build a community of investors seeking a high level of expected value and communication about event driven ideas. Hedges For 2021's Reopening What are they? How and why. Kick ‘em when they’re down. Best Ideas Each December, I offer Sifting the World members a sneak peek at our best idea for the following year. My goal is to offer something so good – and to keep them updated with developments in real time – that this single idea is worth the entire membership dues. WOW! Worth more than double today’s share price. Costs under $7 but could rebound towards its $17 IPO. One specific reason for WOW’s undervaluation.

    VEC

    US$32.63

    Vectrus

    7D

    -0.6%

    1Y

    -29.4%