Truist Turns Bullish On Several Aerospace, Defense Names

Truist analyst Michael Ciarmoli upgrades ratings and price targets for select Aerospace and Defense names.

• The analyst upgraded Spirit AeroSystems Holdings, Inc. SPR to Buy from Hold and raised the price target to $76 (an upside of 57%), from $39.
• The analyst states that the stock remains 57% below its 2018 all-time high and offers the most favorable risk/reward profile among his upgrades.
• Ciarmoli adds that Spirit AeroSystems has outsized exposure to the 737MAX and should be among the biggest beneficiaries in the aero supply chain as monthly production gradually increases.
• The analyst upgraded TransDigm Group Inc  TDG to Buy from Hold and raised the price target to $786 (an upside of 18%), from $600.
• The analyst says, TransDigm is one of the best value creators in the industrial complex and stands to benefit from progressively increasing commercial aerospace aftermarket parts demand in the coming periods.
• Ciarmoli adds that the combination of volume increases and price increases should enable the company to continue to drive its EBITDA margin expansion.
• The analyst upgraded Woodward, Inc.  WWD to Buy from Hold and raised the price target to $143 (an upside of 26%) from $110.
• The analyst believes, as the commercial aero market continues to recover, Woodward will gradually see a return to its status as one of the premier suppliers in the industry.
• Ciarmoli further adds that the company's outsized exposure to the narrow body marketplace, coupled with increasing aftermarket demand and the return of initial provisioning, should drive sustained double-digit aerospace revenue growth over the next 12-24 months.
• The analyst upgraded Hexcel Corp HXL to Buy from Hold and raised the price target to $68 (an upside of 22.4%) from $54. 
• The analyst says the combination of Hexcel's "unique value proposition" and the industry's desire to increase composite adoption will ultimately help drive continued revenue growth, margin expansion, and free cash flow in the coming periods.
• Ciarmoli adds that Hexcel's inventory destocking is done mainly by removing a key overhang.
• The analyst upgraded Heico Corp HEI to Buy from Hold and raised the price target to $182 (an upside of 22%) from $135.
• Price Action: SPR shares are trading higher by 5.5% at $48.38, TDG up by 3.07% at $664.55, WWD by 2.93% at $113.65, HXL by 2.23% at $55.65, and HEI higher by 1.71% at $148.96 on the last check Friday.