The global aerospace and defence sector continues to show resilience, with aftermarket momentum in civil aviation holding firm and corporate sentiment in defence markets described as “as confident as ever”, according to Morgan Stanley.
In a note to clients following an industry conference in London, the bank reaffirmed its “attractive” industry view across both sectors, citing strong civil aviation demand and a sustained upturn in defence spending, particularly in Germany.
Morgan Stanley named Airbus Group (EPA:AIR) and Rolls-Royce Holdings PLC (LSE:RR.) as top aerospace picks, with Rheinmetall and BAE Systems PLC (LSE:BA.) favoured in defence.
At the conference, aerospace executives from Safran and MTU Aero Engines reported robust aftermarket trends, supported by higher traffic, increased scope of work and historically low retirements.
Safran said the recovery in LEAP engine deliveries remained on track, providing a positive read-across for Airbus.
Analysts elsewhere warned this week that the general aerospace aftermarket cycle could turn as soon as next year.
Defence companies struck an even more upbeat tone.
Rheinmetall and Hensoldt highlighted accelerating momentum in Germany, with new orders expected once budget approvals are finalised.
BAE Systems pointed to years of production visibility, while Dassault Aviation outlined plans to double Rafale jet output.