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Aerospace & Defense

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Fundamentals

Size Analysis: The public Market Cap went from $2,320 billion to $2,125 billion over the last quarter. It could be explained by the decrease in number of companies having reported their financials or exited the public market, especially since the trend from 2022Q3 to 2023Q2 was the opposite. On the private market, the number of transactions seemed to remain stable from the past 5 quarters, and the total amount of money transacted during the last quarter is showing a significant increase, coming back to its amounts from 2021Q4 and 2022Q2.

Public Market Dynamics: The industry in general kept increasing its year-over-year returns, with the largest 20 companies almost double-performing the SPY index. The debt to equity ratio is slightly below 40%, and its interest expenses as percentage of revenues stayed at 1.3%. The last quarter has shown its best profitability from the last 8 quarters. With 21.14% gross profit, and 15.30% only for operating expenses to revenues, the net profit margin rose to 3.71%.

Transaction Trends: There was a total of 363 transactions during the quarter, lagging behind the transaction figures observed in 2Q2023. The number of public offerings outpaced private placements, with public offerings higher relative to the last quarter, while private placements declined over the quarter.

Dispersion Insights: Asia emerged as the main contributor to revenues, followed by North America and Africa. M&A activity declined compared to the last quarter, with the highest activity in Asia, followed by Europe. Public offerings and private placements were highest in North America, followed by Asia.

Methodology

We screened CapitalIQ using its industry classification. Transactions were filtered by announced date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Industrials". CapitalIQ subsectors "Aerospace and Defense", "Air Freight and Logistics", and "Passenger Airlines" were used to screen the database. CapitalIQ sectors "Capital Goods" and "Transportation" were used as categories. Our Capital Goods' sectors were defined by keywords from the CapitalIQ market intelligent industry classification. Our Transportation's sectors were defined by their sub-sectors.

THIS REPORT IS NOT TO BE USED OR CONSIDERED UNDER ANY CIRCUMSTANCE BY ANYONE AS INVESTMENT ADVICE

This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.

Spaulding Financial has accurately reflected such information in this research report; however, Spaulding Financial makes no representation as to the sources’ accuracy or completeness and has accepted this information without further verification. Neither all nor any part of the content of this report may be conveyed to the public through advertising, public relations, news, sales, mail, direct transmittal, or other media without the prior written consent of Spaulding Financial. Spaulding Financial ’s research is as of the date reported herein.

Spaulding Financial has no affiliation with any of the companies comprising the industry used as a basis for research in this report, nor does Spaulding Financial hold any investments in the companies listed herein. The content of this report may be used, in part, as a basis for any work that Spaulding Financial performs for you in the future at the sole discretion of Spaulding Financial. All data is from Capital IQ database.

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