Commercial aerospace stocks fall after SunTrust turns bearish, citing 'unprecedented' 737 Max unknowns

Tomi Kilgore - finance.yahoo.com Posted 5 years ago

Shares of a handful of commercial aerospace original equipment manufacturers sank Friday, after SunTrust RH analyst Mike Ciarmoli turned bearish on the sector, citing ongoing uncertainties related to the grounding of Boeing Co.'s 737 Max jets. Along with cutting the sector rating to negative, shares of Astronics Corp. slumped 7.1%, Barnes Group Inc. slid 3.8% and Spirit AeroSystems Holdings Inc. lost 4.0%, after Ciarmoli downgraded those companies to sell from hold; and shares of Ducommun Inc. dropped 5.6% and Woodward Inc. shed 2.3% after Ciarmoli downgraded them to hold from buy. "Given the current industry unknowns tied to 737, and our expectation that 2019/2020 outlooks and Street estimates need to be lowered, we cannot continue to advise investors to buy, or in some cases, own names in our coverage universe during this uncertain and unprecedented time...," Ciarmoli wrote in a note to clients. " We would note, however, that this is a short-term tactical downgrade which we will keep in place until more clarity around the MAX and supplier implications become more well known." The S&P Aerospace & Defense Select Index has rallied 27% year to date, while the S&P 500 has gained 15%.

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