航空航天与国防行业：航油危机？一切向好

Commercial Aero: Jet fuel crisis? All's well that ends well? particularlyabout the aftermarket.The fearwas thatpressure on cash and earningslower across the industry, starting after the initial bombing of Iran on February 28th.OE stocks (Boeing, Airbus) should have been unaffected given their multiyear backlogs(they were still hit), while shorter cycle aftermarket stocks (e.g., GE, SAF, SARO, TDG (notcovered)couldfacemore pressure. +19173448430douglas.harned@bernsteinsg.com +442076766820 +442076767067nestor.wester@bernsteinsg.com remain and crack spreads are still high.Nevertheless, barring an escalation of hostilities(newstrikesoccurredoverthelasttwodays),weshouldseeacontinuedmoderationofoil (and jetfuel)prices.Regardless ofone'sviewontheattractiveness ofthe US-lranagreement,the US appearstobeworkingto extricateitself fromthe conflict,witheconomic growth nowthe principal focus.This means likely opening the Strait ofHormuz, despite ongoing strikes from both sides. Specialist Sales +1917344 8401steve.song@bernsteinsg.com As we have stressed,fuel prices are just onepart of the equation. If the globaleconomy is strong,airlines can readilymake it through highfuel price periods.We havenot seen a true fuel-price-driven downturn for the industry since 1991. But, we have seenserious damage from economic downturns (COVID, Global Financial Crisis, post-9/11).normalizing.These are conditions for commercial aircaft success (OE and aftermarket). The reality sofarhasbeenthat neither OEnoraftermarket-orientedcompanieslegacy engines (such as CFM-56 or V2500, where there is the most risk) were still running12-18 months.As ofQ2,none ofthe major companies had seenanymaterial impact oncurrent numbers or in their discussions with customers, with the exception of very short-term issues in the Middle East. Those worries should now be over. We expect that we areback to the growth outlook we saw at the start of the year. On the OE side,there has been noreal risk, with Airbus and Boeing each sold outon most products through 2032. If any delivery slot opens, there will be a lineup of otherairlines to take it. That said, Airbus and Boeing shares moved lower after the start of the warand have not fully recovered. Each should have significant upside from here. Foraftermarketstocks,wesawcautiousguidanceinQ1,givenuncertaintyaroundthe war.That cautious guidance even came with strong Q1 performance.With theRolls-Royce, and Safran,for example. Wehave not yet seen full recoveries at others,including MTU and StandardAero.Others,with mixed OE/aftermarket businesses, (e.g.Howmet, ATl, Carpenter,Woodward (latterthree not covered)are fully recovered orbetter.Whenaftermarket-orientedcompaniesreportQ2results,weexpecttoseemoreconfidencein guidance upside (to be addressed in a subsequent preview report). INVESTMENTIMPLICATIONS The outlook ispositive across theboardfor commercial aerospacestocks if we see continuedmoderation of oil prices.Thisis positive for comercial aircraft stocks,particularly if the global economic outlook remains positive. Even if fuel prices remainmodestly elevated, we believe the risk should befairly low unless we see an economic downturn.We particularly like thecompanies thatt have not yet seen recovery to pre-war levels. Those include Boeing, Airbus, and StandardAero. We discussed the impact of fuel prices early in the lIran conflict in our April 5th Research Call,"Commercial Aircraft: Fuel price driven downturn? Will perfect storms of the past reappear and kill the market? What to watch" In a recent follow-up, wediscussed the potential for reopening of the Straitof Hormuz (see,"European Aerospace:Navigating the reopening of Hormuz"). Afterfour months of concern overfuel price trends, Brent is now moving back to pre-war levels. The stocks have been volatile since the US bombing of Iran began on February 28tn.This volatility was the result of uncertainty regarding the outcome ofthe war, particularly as it related to the Strait of Hormuz. We assume that the currrent Memorandum of Understanding (MoU) islikelyto keep the Strait of Hormuz relatively open, although the agreement has been shaky at best, with attacks from both sidescontinuing over the last two days.Belief in the MOUhas allowed oil prices to moveback to pre-war levels.Brenthas alreadymoved below$73/bbl. While there has been much criticism surrounding the MoU, that criticism has been about the U.S.meeting the original objectivesof the conflict.Based on President Trump's statements, the one objectivethat appearsto mattermost now is gettingthe Straitfavoritepresidentbe Herbert Hoover, he was always the one /didn't wanttobe" Statements like this indicate thatthecentral goalis nowabout getting oil prices down and supporting economic growth.We donot expectto see actions that would drivepricesbackupto$100+levelsforBrent. Share price behaviorExhibit1showsthebehaviorofcommercialaeroaftermarketstocksYTD(RTXnotshownbecauseoftheoutsizedimpactofits defense busin