GE Aerospace should win as Boeing faces manufacturing problems, according to Artisan Partners’ Chris Smith. “GE has a virtual monopoly on the new Leap engine that powers all new narrowbody aircraft,” said the portfolio manager for Artisan’s AnteroPeak Group, which could account for more than 80% of engines flying over the next decade. Delivery delays following a Boeing 737 Max 9 door plug rupture in January have forced airlines to rev up older aircraft, boosting demand for GE products, Smith said. He sees GE as the “premier” industrial stock, but also cited aircraft parts maker TransDigm as a beneficiary. Aerospace and defense stocks have risen across the board in 2024, consistently hitting new highs amid rising global geopolitical tensions. The iShares US Aerospace & Defense ETF ITA) is up nearly 16% this year. GE shares are up 70% in 2024, while TransDigm is up 35%. Boeing shares have struggled this year, dropping 34% to 2024 as they face intense scrutiny following their explosive failure earlier this year. In late July, the company reported a wider-than-expected second-quarter loss and weaker-than-expected revenue. Smith also sees GE benefiting from reinvestment in U.S. manufacturing after decades of heavily outsourcing production. “We’re seeing a massive acceleration in manufacturing buildout as we deglobalize and domesticate supply chains,” he said.
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