Baird downgrades RTX, Northrop Grumman to 'neutral'

Triumph

17/01/2024 12:30

** Brokerage Baird expects a mixed 4Q23 for most defense
stocks and bullish sentiment for aerospace companies - led by
rising OEM rates and robust growth in the aftermarket segment 
    ** Brokerage downgrades aerospace and defense co Northrop
Grumman Corp  NOC.N  to "neutral" from "outperform", reiterates
PT
    ** Cites limited margin upside in 2024 due to to co's
early-stage development programs, expects an update on ongoing
share buybacks related to the B-21 Raider jet production charge
of $1.2 bln flagged by management in late-2022
    ** It also downgrades peer RTX Corp  RTX.N  to "neutral"
from "outperform", but lifts PT to $94 from $88 representing
~10% upside to stock's last close
    ** Sees RTX’s 2024 to be in line with Street expectations,
with limited upside for estimates, while accounting for the GTF
engine issue cost 
    ** However, brokerage upgrades peer Triumph Group  TGI.N  to
"outperform" from "neutral", sees positive investor reaction to
co's acceleration of debt reduction targets
    ** Lifts TGI's PT to $20 from $13, representing a 32% upside
to its last close

 (Reporting by Aatreyee Dasgupta)
 ((Aatreyee.Dasgupta@thomsonreuters.com))