Aerospace & Defense: 2026 Outlook & Relative Value
Matt Woodruff, CFA: Head of Aerospace & Defense / Transports - 糖心视频
Arda Tirnakli: Analyst, Aerospace & Defense / Transports - 糖心视频
10 December 2025
Insights into Aerospace & Defense: 2026 Outlook & Relative Value, including:
- Industry Growth Drivers: Explore how the Aerospace & Defense 2026 Outlook & Relative Value is shaped by robust OEM production ramp-ups, supply chain dynamics, and resilient global defense spending.
- Credit Quality Trends: See why sector credit quality improved in 2025 and is set for further gains in 2026, with upgrades outpacing downgrades and balance sheets strengthening across major names.
- Defense Spending Momentum: Understand the impact of heightened geopolitical risk, rearmament, and procurement reform on defense budgets and contract flows through the end of the decade.
- OEM & Supply Chain Highlights: Get insights into production targets and key challenges for Boeing and Airbus, including forecasts for record deliveries and ongoing supply bottlenecks in engines and seats.
- Bond Market & Relative Value Calls: Learn which investment-grade and high-yield credits stand out, how the report鈥檚 Market Perform view is anchored, and where opportunities and risks lie in the current spread environment.
Executive Summary
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We present our 2026 Outlook for the Aerospace & Defense industry.聽Key themes in aerospace include the continued ramp up in OEM output, even as supply chains remain fragile; at the same time, U.S. and global airlines face a sensitive demand backdrop that could temper aircraft orders.
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Defense spending momentum is set to persist through the decade amid heightened geopolitical risk and rearmament, with procurement reforms targeting faster contracting, more modular architectures, and greater access for smaller suppliers.
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Credit quality improved broadly in 2025 with upgrades and positive actions outnumbering negatives, and we expect further improvement in 2026 supported by robust demand and balanced-sheet strengthening.
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