GE Aerospace should triumph as ongoing manufacturing troubles plague Boeing , according to Artisan Partners’ Chris Smith. “GE has really effectively become a monopoly with their new leap engine, which will be on all new narrow-body planes,” which could account for more than 80% of engines in the air over the next decade, according to the portfolio manager of the Antero Peak Group at Artisan. Delivery delays following Boeing’s 737 Max 9 door-plug blowout in January are forcing airlines to service older aircrafts and are fueling pent-up demand for GE’s products, according to Smith. He views GE as a “premier” industrial stock, but he also highlighted aircraft components producer TransDigm as another beneficiary. Aerospace and defense stocks have rallied across the board in 2024, consistently notching new highs as global geopolitical tensions mount. The iShares U.S. Aerospace & Defense ETF ITA) is up nearly 16% this year. GE shares have popped 70% in 2024, while TransDigm is up 35%. Boeing shares have struggled this year, off 34% in 2024 as the company faces heightened scrutiny in light of the blowout earlier this year. In late July, the company reported a wider-than-expected loss in the second quarter, while revenue also missed the mark. Smith also views GE as a beneficiary of reinvestments in U.S. manufacturing after decades of heavily outsourced production. “You’re seeing manufacturing construction accelerate meaningfully as you have this de-globalization and supply chains coming closer to home,” he said.
