The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how AerSale (NASDAQ:ASLE) and the rest of the aerospace stocks fared in Q3.
Aerospace companies often possess technical expertise and have made significant capital investments to produce complex products. It is an industry where innovation is important, and lately, emissions and automation are in focus, so companies that boast advances in these areas can take market share. On the other hand, demand for aerospace products can ebb and flow with economic cycles and geopolitical tensions, which can be particularly painful for companies with high fixed costs.
The 12 aerospace stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2% above.
In light of this news, share prices of the companies have held steady as they are up 1.5% on average since the latest earnings results.
AerSale (NASDAQ:ASLE)
Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ:ASLE) delivers full-service support to mid-life commercial aircraft.AerSale reported revenues of $82.68 million, down 10.6% year on year. This print fell short of analysts’ expectations by 11.1%. Overall, it was a softer quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.
AerSale delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 1% since reporting and currently trades at $5.96.
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Best Q3: Ducommun (NYSE:DCO)
California’s oldest company, Ducommun (NYSE:DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.Ducommun reported revenues of $201.4 million, up 2.6% year on year, outperforming analysts’ expectations by 3.8%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 4.7% since reporting. It currently trades at $68.44.
Weakest Q3: Textron (NYSE:TXT)
Listed on the NYSE in 1947, Textron (NYSE:TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.Textron reported revenues of $3.43 billion, up 2.5% year on year, falling short of analysts’ expectations by 2.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations significantly.
As expected, the stock is down 1.6% since the results and currently trades at $85.45.
Rocket Lab (NASDAQ:RKLB)
Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ:RKLB) offers rockets designed for launching small satellites.Rocket Lab reported revenues of $104.8 million, up 54.9% year on year. This number beat analysts’ expectations by 2.4%. It was an exceptional quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.
Rocket Lab pulled off the fastest revenue growth among its peers. The stock is up 33.7% since reporting and currently trades at $19.60.
TransDigm (NYSE:TDG)
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE:TDG) develops and manufactures components and systems for military and commercial aviation.TransDigm reported revenues of $2.19 billion, up 18% year on year. This print beat analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but full-year EPS guidance missing analysts’ expectations.
TransDigm had the weakest full-year guidance update among its peers. The stock is down 7.7% since reporting and currently trades at $1,275.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
