Hot Picks: Industrial strength lifts aerospace and defence outlook
BNN Bloomberg
Aerospace and defence stocks are gaining traction as industrials outperform, supply remains tight and global defence spending accelerates.
BNN Bloomberg spoke with Evelyn Chow, senior research analyst at Neuberger Berman, about why she is leaning into industrials through aerospace and defence exposure, highlighting cyclical recovery, free cash flow acceleration and a global shift toward modernized defence capabilities.
Read the full transcript below:
ANDREW: It’s time for Hot Picks in aerospace and defence. That’s what’s on the menu today. Our guest has ITT as her top selection. She believes the company will benefit from its acquisition of equipment maker SPX Flow. We’re joined by Evelyn Chow, senior research analyst at Neuberger Berman. Thank you very much for joining us, Evelyn.
EVELYN: Thank you, Andrew. It’s great to be here. In this really volatile time, where we’ve seen drawdowns in TMT and a lot of macro cross-currents, one area that really stands out to me as a global equity portfolio manager is industrials, and specifically aerospace and defence.
You might be surprised to know that over the last 12 months, industrials have actually outperformed the XLI by over 1,000 basis points. That’s been driven by a confluence of factors, including better-than-expected top-line growth, very capable navigation of the tariff environment, a broadening cyclical recovery trade and, last but not least, extremely tight supply-and-demand dynamics, especially within commercial aerospace.
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