巴克莱-美股-航空航天与国防行业-美国航空航天与国防：商务机调查-2019.12.11-26页.pdf

Equity Research 11 December 2019 CORE Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 18.Restricted-Internal U.S.Aerospace&Defense Business Jet Survey:Hits New Low;Reduce GD/TXT Forecasts Survey index drops 12%to 39;now forecast decline in 2020 deliveries for GD/TXT Reducing delivery forecasts:On the back of continued weakness in our survey,we have reduced our 2020-21 bizjet delivery forecast for GD and TXT by 10%.Overall,we forecast Gulfstream large cabin deliveries 7%lower in 2020 and 8%lower for Cessna ex the ramp in initial Longitude deliveries(as compared to prior forecast).Indicator at 39:Our Barclays Business Jet Indicator(BBJI)continues to decline,hitting a new low at 39,12%lower than our prior survey(September).By cabin class,our small cabin index came in slightly better than mid and large.Our straight up measure of overall business conditions still came through above average at 5.8(0-10 scale),slightly below our prior survey,but off nearly 20%from its high in late 2018.Election year overhang:Respondents appear cautious on the outlook into 2020 with 61%of respondents expecting the upcoming U.S.presidential election cycle to weigh on the market.See pages 13-14 for additional commentary from industry professionals,who generally highlight a market characterized by slowing transaction activity,declining prices and the overhang of political uncertainty.Component scores:Each of our component scores(pricing,12-month outlook,inventory level,willingness to increase inventory)other than customer interest declined to new lows in November with pricing and inventory both registering 20%declines.On absolute basis,our customer interest and inventory scores continue to hold in best,near 50,indicating stable customer interest and near normal used inventory levels.G700:Most respondents(68%)expect Gulfstreams recently announced ultra-large cabin G700 business jet will at least modestly cannibalize G650 demand,including 23%that expect significant cannibalization.However,respondents dont foresee much of an impact to G650 demand over the near term as G700 wont deliver in significant volumes for several years.INDUSTRY UPDATE U.S.Aerospace&Defense POSITIVE Unchanged For a full list of our ratings,price target and earnings changes in this report,please see table on page 2.U.S.Aerospace&Defense David Strauss+1 212 526 5580 BCI,US Matt Akers,CFA+1 212 526 9019 BCI,US Kate Copouls,CPA+1 212 526 3283 BCI,US Barclays|U.S.Aerospace&Defense 11 December 2019 2 Summary of our Ratings,Price Targets and Earnings Changes in this Report(all changes are shown in bold)Company Rating Price Price Target EPS FY1(E)EPS FY2(E)Old New 10-Dec-19 Old New%Chg Old New%Chg Old New%Chg U.S.Aerospace&Defense Pos Pos General Dynamics Corp(GD)OW OW 180.48 215.00 210.00-2 11.87 11.87-12.80 12.60-2 Textron Inc(TXT)OW OW 44.14 65.00 57.00-12 3.75 3.75-3.90 3.65-6 Source:Barclays Research.Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in the reporting currency.FY1(E):Current fiscal year estimates by Barclays Research.FY2(E):Next fiscal year estimates by Barclays Research.Stock Rating:OW:Overweight;EW:Equal Weight;UW:Underweight;RS:Rating Suspended Industry View:Pos:Positive;Neu:Neutral;Neg:Negative Barclays|U.S.Aerospace&Defense 11 December 2019 3 Barclays Business Jet Survey Our Business Jet Survey is designed to capture timely insights on market conditions and sentiment.We regularly survey a group of US and international broker/dealers,manufacturers,fractional providers,financiers and others,from whom we received 93 responses in November.Investment Conclusion Our Barclays Business Jet Indicator(BBJI)continues to decline,hitting a new low at 39,12%lower than our prior survey(September).By cabin class,our small cabin index came in slightly better than mid and large.Our straight up measure of overall business conditions still came through above average at 5.8(0-10 scale),slightly below our prior survey,but off nearly 20%from high in late 2018.Respondents appear cautious on the outlook into 2020 with 61%of respondents expecting the upcoming U.S.presidential election cycle to overhang the market.See pages 13-14 for additional commentary from industry professionals,who generally noted slowing transaction activity and declining prices.Each of our component scores(pricing,12-month outlook,inventory level,willingness to increase inventory)other than customer interest declined to new lows in November.Our customer interest and inventory scores continue to hold in best,near 50,indicating stable customer interest and normal used inventory levels.FIGURE 1 Barclays Business Jet Indicator(BBJI)Source:Barclays Research On the back of continued weakness in our survey,we have reduced our 2020-21 bizjet delivery forecast for GD and TXT by 10%.Overall,we forecast Gulfstream large cabin deliveries 7%lower in 2020(ex G280)and 8%lower for Cessna ex the ramp in initial Longitude deliveries(as compared to prior forecast).ComponentNov-19Sep-19ChangeCustomer Interest49475%Pricing2633-23%12 Month Outlook3237-12%Inventory Levels4659-22%Willingness to Increase Inventory4045-10%Composite Indicator3944-12%Young Inventory6779-15%Business Conditions5.85.9-3%Barclays|U.S.Aerospace&Defense 11 December 2019 4 FIGURE 2 GD Delivery Forecast(Large Cabin ex G280)FIGURE 3 TXT Delivery Forecast(ex Longitude)Source:Barclays Research Source:Barclays Research FIGURE 4 GD Relative Valuation(vs S&P)on N12M P/E FIGURE 5 TXT Relative Valuation(vs S&P)on N12M P/E Source:Bloomberg and Barclays Research.Note:Using consensus estimates.Source:Bloomberg and Barclays Research.Note:Using consensus estimates.We have reduced our EPS estimates and price targets for GD(to$210 from$215)and TXT(to$57 from$65).For GD,our new price target reflects a 50/50 blend of the following methodologies:DCF(8%WACC and 3%terminal growth)and a 13.5x multiple(14x prior)on our 2021 pension-adjusted FCFPS estimate.For TXT,our new price target reflects a 50/50 blend of DCF(3%terminal growth,9%WACC)and a 15x multiple(same as prior)on our 2020 EPS estimate.707580859095100105110115120201720182019E2020E2021E160165170175180185190195200201720182019E2020E2021E-40%-30%-20%-10%0%10%20%30%Dec-11Jun-12Dec-12Jun-13Dec-13Jun-14Dec-14Jun-15Dec-15Jun-16Dec-16Jun-17Dec-17Jun-18Dec-18Jun-19Dec-19-40%-30%-20%-10%0%10%20%30%Dec-11Jun-12Dec-12Jun-13Dec-13Jun-14Dec-14Jun-15Dec-15Jun-16Dec-16Jun-17Dec-17Jun-18Dec-18Jun-19Dec-19Barclays|U.S.Aerospace&Defense 11 December 2019 5 Methodology&Results Our proprietary Barclays Business Jet Indicator is designed to measure the total value of the responses to our survey questions.We have weighted each factor in our BBJI based on our perception of its importance to overall market conditions.Our BBJI is scored on a scale of zero to 100,with 51-100 indicating incrementally strengthening market conditions and 0-49 indicating incrementally weakening market conditions(with a score of 50 indicating stable conditions).Our most recent survey registered 39,12%lower from the prior.FIGURE 6 Barclays Business Jet Indicator(BBJI)Source:Barclays Research Our BBJI declined 10-15%for each cabin class;our large cabin score is now lowest at 36,followed by midsize cabin at 39 and small cabin at 41.Scores below 50 for each cabin class indicate incrementally weakening conditions.FIGURE 7 BBJI by Cabin Class-Small FIGURE 8 BBJI by Cabin Class-Midsize Source:Barclays Research Source:Barclays Research 64686868676971625455514944390102030405060708090100666866646671736557 57534946410102030405060708090100626671686572706152544846 45390102030405060708090100Barclays|U.S.Aerospace&Defense 11 December 2019 6 FIGURE 9 BBJI by Cabin Class-Large Source:Barclays Research Our North America index has dropped by more and is now at lower levels than Europe.FIGURE 10 BBJI North America FIGURE 11 BBJI-Europe Source:Barclays Research Source:Barclays Research Participant Profile Of industry professionals that responded to our survey,the majority are broker/dealers.Broker/dealers are involved in the purchase and sale of both new(direct from manufacturer)and used aircraft.Most of our survey participants are located in North America(80%)with an additional 16%in Europe.6569 70 69686369594751 5048413601020304050607080901006567696868717564555451494537010203040506070809010064726668686062564957484944420102030405060708090100Barclays|U.S.Aerospace&Defense 11 December 2019 7 FIGURE 12 Participant Role FIGURE 13 Participant Location Source:Barclays Research Source:Barclays Research While the majority of respondents are located in the US,roughly a third transact more than half of their business with non-US customers.FIGURE 14 Proportion of Business Transacted Outside of US FIGURE 15 Average Transaction Size Source:Barclays Research Source:Barclays Research Broker/Dealer69%Other16%Financier10%Manufacturer5%North America80%Europe16%Latin America2%Asia&Pacific2%Less than 25%52%More than 75%16%25-50%16%50-75%12%All4%0-5M29%10-20M29%5-10M27%20-30M9%30M+6%Barclays|U.S.Aerospace&Defense 11 December 2019 8 Overall Business Conditions In the first question,we asked,“On a scale of 0 to 10,how would you characterize overall business conditions after factoring in typical seasonality(0=the worst ever,10=the best ever)?”We received 88 responses to this question with scores ranging from 2 to 9.Note that while our BBJI(discussed earlier)measures incremental change from the prior period,this question is meant to measure the absolute level of business conditions.Our straight up measure of overall business conditions came through at 5.8(0-10 scale),slightly below our prior survey,but off nearly 20%from its high in late 2018.FIGURE 16 Overall Business Conditions FIGURE 17 Overall Business Conditions Score Source:Barclays Research Source:Barclays Research G700 Launch In the next question,we asked,“With Gulfstreams launch of its G700,how much do you think this aircraft could cannibalize future G650 demand(in other words do you view the G700 as additive to or replacing the G650)?Of the 91 responses to this question,23%indicated G700 will significantly cannibalize G650 with another 45%indicating modest cannibalization while 32%see little to no cannibalization.Elections EE0%5%10%15%20%25%30%012345678910%of responsesBusiness Conditions Rank6.26.46.56.76.76.67.06.6 6.66.06.15.95.95.85.05.56.06.57.07.5FIGURE 18 G700 Cannibalize G650 Demand Source:Barclays Research Modestly cannibalize G65045%Slightly cannibalize G65031%Significantly cannibalize G65023%No G650 cannibalization1%Barclays|U.S.Aerospace&Defense 11 December 2019 9 2020 Election Cycle Impact In the next question,we asked,“Do you view the upcoming U.S.presidential election cycle in 2020 as positive(stimulate/accelerate transactions)or negative(defer transactions)for the market over the next 6-12 months?”Of the 92 responses to this question,11%expect the upcoming election cycle will be positive,while 61%expect the upcoming election cycle will be negative,with the remainder(28%)indicating no impact.FIGURE 19 Election 2020 Source:Barclays Research Customer Interest Next,we asked,“Since the last survey in September,has the level of customer interest improved,stayed the same or deteriorated?”Of the 92 responses to this question,24%indicated customer interest had improved,while 25%indicated customer interest had deteriorated,with the remainder(51%)indicating customer interest had stayed the same.Our customer interest score has held in near 50 in 2019,indicating flattish interest off of strong interest in 2018.Negative61%Neutral28%Positive11%20 FIGURE Customer Interest FIGURE 21 Customer Interest Score Source:Barclays Research Source:Barclays Research Stayed the same51%Deteriorated25%Improved24%79777375707274624549 494647490102030405060708090100Barclays|U.S.Aerospace&Defense 11 December 2019 10 By region,customer interest appears slightly weaker in Europe than North America.FIGURE 22 Customer Interest North America FIGURE 23 Customer Interest Europe Source:Barclays Research Source:Barclays Research Pricing In the next question,we asked,“Since our last survey in September,have overall pricing levels increased,stayed the same or decreased?”Of the 92 responses to this question,7%indicated overall pricing levels had increased,while 55%indicated pricing levels had decreased,with the remainder(38%)indicating overall pricing levels had stayed the same.Following strong improvement in 2018,our pricing score has declined sharply,reaching another new low this month.FIGURE 24 Pricing FIGURE 25 Pricing Score Source:Barclays Research Source:Barclays Research 787774737173766445464947484901020304050607080901008575687659656450455643 4344470102030405060708090100Decreased55%Stayed the same38%Increased7%42576460576569635348434233260102030405060708090100Barclays|U.S.Aerospace&Defense 11 December 2019 11 12-month Outlook In the next question,we asked,“Over the next 12 months,do you expect overall business conditions to improve,stay the same or deteriorate?”Of the 91 responses to this question,11%indicated they expect business conditions to improve,while 46%expect overall business conditions to deteriorate,with the remainder(43%)indicating they expect overall business conditions to stay the same.Our 12-month outlook score has trended lower since the peak in January 2018(following passage of U.S.tax reform),and also reached a new low this month.FIGURE 26 Outlook FIGURE 27 Outlook Score Source:Barclays Research Source:Barclays Research Inventory In the next question,we asked,“How would you characterize current inventory levels?”Of the 82 responses to this question,20%indicated current inventory levels are high,while 11%indicated inventory levels are currently low,with the remainder(69%)indicating current inventory levels are in line with the historical average.This dropped our inventory score below 50 for the first time this month.FIGURE 28 Inventory FIGURE 29 Inventory Score Source:Barclays Research Source:Barclays Research Deteriorate46%Stay the same43%Improve11%86 868176757266474051444137320102030405060708090100Average69%High20%Low11%565765 6570717573 7369666459460102030405060708090100Barclays|U.S.Aerospace&Defense 11 December 2019 12 Young Inventory In the next question,we asked,“How would you characterize current inventory levels of relatively young(0-10yr)used aircraft?Of the 82 responses to this question,11%indicated current inventory levels for young aircraft are high,while 45%indicated young inventory levels are currently low,with the remainder(44%)indicating current young inventory levels are in line with the historical average.Our you