Aerospace & Defense Industry Outlook Strong Despite Democrat's Victory, Says S&P Equity Research
November 15 2006 - 11:40AM
PR Newswire (US)
Democrats Unlikely to Withhold Funding for Iraq NEW YORK, Nov. 15
/PRNewswire/ -- Despite their victory on Election Day, Standard
& Poor's Equity Research Services believes that Democrat's
majority in Congress is unlikely to impact the health of the
aerospace and defense industry because of a number of longer term
issues facing the industry. This and other findings are available
in a semi-annual report, Aerospace & Defense: Industry Survey,
published by Standard & Poor's, a leading provider of
independent investment research. Standard & Poor's Equity
Research believes that there are a number of factors at play, which
will lead to sustained, long-term growth in the aerospace and
defense industry. These factors include the looming need to upgrade
military equipment following extended tours in Iraq and under-
investment during the late 1990s and the early part of this
century, continued spending on homeland defense and anti-terrorism
systems, and the absence of a well-defined plan for early U.S.
troop withdrawals from Iraq. "The results on Election Day and the
removal of Donald Rumsfeld as Secretary of Defense have created a
bit of uncertainty in the defense industry, but to date, The
President's goal of stability in Iraq is still in place and that
shouldn't be discounted when looking at shares of this group," said
Richard Tortoriello, Aerospace & Defense Analyst, Standard
& Poor's Equity Research Services. "On the aerospace side, we
expect both commercial and business jet markets to remain strong,
buoyed by global economic growth, and see prospects for a return to
growth in the regional jet market, as U.S. carriers' financial
health improves." Standard & Poor's Equity Research believes
the following aerospace and defense companies are well positioned
to grow. S&P has a "Strong Buy" recommendation (5-STARS out of
5) on L-3 Communications (NYSE: LLL; $80.93) due to strong position
in the homeland defense space and numerous long-term government
contracts. In addition, the S&P has "Buy" recommendations (4-
STARS) on shares of The Boeing Company (NYSE: BA; $87.40) because
of the growth of its commercial aerospace business coming at a time
when its chief rival is struggling and its recent wins in the
defense sector. Finally, S&P has a "Buy" on Lockhead Martin
(NYSE:LMTNYSE:$88.55) due to its rising cash flows, attractive
valuations and the increase in international sales for its F-16
fighter planes. To view a video clip of Standard & Poor's
equity analyst Richard Tortoriello discussing the defense industry,
please click here
mms://a1802.v19724b.c19724.g.vm.akamaistream.net/7/1802/19724/v0001/streamlogics.download.akamai.com/25711/S_and_P/sptv-survey-54.wmv
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Statistics, How to Analyze a Company, Industry References,
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industry. Both text and data are provided, as are references to
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release. The analyst quoted above is a Standard & Poor's equity
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