Aero sector poised for growth in 2026, J.P.Morgan says

The outlook for aerospace and defense companies remains mostly positive into 2026, says J.P.Morgan

"With multiple years of production in Boeing and Airbus backlogs, traffic growing and an aircraft fleet that is ~2 years older on average than pre-pandemic, the backdrop for commercial aero manufacturers is favorable" - JPM

Boeing BA.N remains a top pick, brokerage says; "the opportunity is straightforward: the company must build and deliver more aircraft"

JPM raises Boeing's PT to $245 from $240
Brokerage also says rising global defense spending and slower local capability buildouts are creating strong export opportunities for U.S. defense contractors

It, however, downgrades stock rating on Lockheed Martin LMT.N to "neutral" from "overweight"

"The pension cash flow headwind in 2027 should make it difficult to grow cash flow, absent some outsize working capital reduction, and so the consensus for 8% growth looks high to us" - JPM

S&P 500 Aerospace & Defense .SPLRCAERO index up ~36% YTD