巴克莱-美股-航空航天与国防行业-尽管竞争激烈但预计2019年零部件市场将出现较高个位数的增长-2019.1.18-28页.pdf

Equity Research 18 January 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 20.Aftermarket Update Forecast High Single Digit Aftermarket Growth in 2019 Despite Tough Comp Our analysis of global airline flight schedules indicates 6%flight hour growth through Q1 2019.We think this along with a favorable fleet mix portends continued strong aftermarket results despite increasingly difficult YOY comps.Driven by high new aircraft delivery growth in 2011-14,we forecast that the older out-of-warranty fleet,which generates the majority of aftermarket demand,will grow at a relatively high level for the next several years.As a result,assuming mid single-digit global flight hour growth from here,we forecast high single-digit aftermarket growth in 2019-20(vs.13%in 2018 through Q3).We estimate the older aircraft(out-of-warranty)fleet will grow at a high level as large numbers of aircraft age out of their warranty period.Specifically,we estimate that the fleet of out-of-warranty(6+years old)aircraft will grow 4%in 2019-21,above recent levels.In particular,we estimate growth for the key 6-15 year old fleet,the most heavily utilized out of warranty aircraft,will accelerate to 5-6%,the highest level since 2012.The aftermarket should also continue to benefit from initial provisioning on new aircraft types(A350/A320neo/737 MAX/A220).Global flight schedules indicate overall narrowbody flight hour growth at 6-7%,150 bps ahead of widebody.By engine manufacturer,we estimate flight hours are growing fastest for Rolls Royce(10-11%)driven by Trent,followed by Safran(7-8%)driven by LEAP,with in line growth at GE and below market growth at Pratt&Whitney(3-4%).TDG(Overweight)is the primary beneficiary of continued aftermarket strength,which we think will allow it to continue to outgrow its peers even in a higher interest rate environment.While we dont see TDG growing as fast as in the past when it outgrew its peers by 2x,we believe this is reflected in current valuation with TDG trading at a smaller than normal 10%premium to the group.Among our coverage,WWD(EW)and ESL(EW)also have significant aftermarket exposure.INDUSTRY UPDATE U.S.Aerospace&Defense POSITIVE Unchanged 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|Aftermarket Update 18 January 2019 2 Investment Summary Our analysis of global airline flight schedules indicates 6%flight hour growth through Q1 2019,still relatively strong,although 100 bps below levels seen in early 2018.Flight hour growth has run ahead of traffic and capacity for most of 2018 after lagging for most of 2016-17.FIGURE 1 Global Flight Hour Growth vs.Traffic/Capacity Growth Global airline flight schedules indicate 6%flight hour growth through Q1 Source:IATA,Diio,Flight Global and Barclays Research.Note:RPK and ASK growth on R3M basis We think continued strong flight hour growth along with a favorable fleet mix portends continued strong aftermarket results to come.More than overall flight hour growth,we have found that the aftermarket correlates closely with out-of-warranty(6+years old)flight hour growth.FIGURE 2 Out-of-warranty Flight Hour Growth vs.Aftermarket Growth(YOY)Out-of-warranty flight hour growth is the key driver of aftermarket Source:Diio,Company reports and Barclays Research.Note:AM includes TDG/HON/COL/UTX.2%3%4%5%6%7%8%9%Sep-12Mar-13Sep-13Mar-14Sep-14Mar-15Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19Flight Hour Growth,YoYRPK GrowthASK Growth-20%-15%-10%-5%0%5%10%15%20%25%Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12Mar-13Sep-13Mar-14Sep-14Mar-15Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19Out of Warranty Flight Hr GrowthAverage AM GrowthBarclays|Aftermarket Update 18 January 2019 3 Our regression model indicates that the aftermarket typically comes through at the rate of 1.5-2.0 x out of warranty flight hours.Our aftermarket forecast assumes a 1.5x multiple to be conservative.FIGURE 3 6+Year Flight Hour Growth vs.Commercial Aftermarket Growth Source:FlightGlobal,FlightAware and Barclays Research We continue to see favorable underlying fleet dynamics for the aftermarket over the next several years,namely relatively high growth out of the installed base of older out-of-warranty fleet.Specifically,we estimate that the fleet of out-of-warranty(6+years old)aircraft will grow 4%in 2019-21,higher than every year other than 2018.The aftermarket should also continue to benefit from strong initial provisioning on new aircraft types including the A350,the new narrowbodies(A320neo and 737 MAX)and A220.We estimate that 80 airlines will take initial delivery of these new aircraft types in 2019,similar to 2018.y=1.80 x-0.01R=0.67-20%-15%-10%-5%0%5%10%15%20%25%-6%-4%-2%0%2%4%6%8%Average Aftermarket Growth6+Year Flight Hours Growth FIGURE 4 In-warranty vs.Out-of-warranty Fleet Growth Out-of-warranty flight hour growth is growing well above the rate of the last several years Source:Flight Global and Barclays Research 0%1%2%3%4%5%6%7%2010201120122013201420152016201720182019E2020E2021E0-56+Barclays|Aftermarket Update 18 January 2019 4 FIGURE 5 Number of Operators Taking New Aircraft Types for First Time Higher levels of initial provisioning should also contribute Source:Flight Global Barclays Research Assuming mid single-digit global flight hour growth from here,we forecast high single-digit aftermarket growth in 2019-21.While this represents a deceleration from very strong 14%growth in 2018,we think high single-digit aftermarket growth will still yield upside to current expectations.FIGURE 6 Barclays Aftermarket Growth Forecast We forecast high single-digit aftermarket growth through 2021 Source:Barclays Research In addition to airline schedules,we also closely monitor movements in the parked fleet of mid-life aircraft(11-20 years old)as we have found this to be historically correlated with aftermarket growth.The drawdown of mid-life aircraft that began in late 2017 appears to have moderated most recently.020406080100201120122013201420152016201720182019E2020E787737 MAXA320neoA350A2200%2%4%6%8%10%12%14%16%2013201420152016201720182019E2020E2021E8%CAGR 2019-21EBarclays|Aftermarket Update 18 January 2019 5 FIGURE 7 12 Month Change in Parked 11-20 Year Old Aircraft Source:Flight Global and Barclays Research.Note:Y axis represents number of aircraft.Aftermarket comparisons become more difficult in Q4.By company,we estimate the most difficult comparisons in 2019 will be for GE,SAF,UTX and WWD.FIGURE 8 Quarterly Aftermarket Growth The aftermarket grew 13%in 2018 through Q3 Source:Barclays Research and company reports The aftermarket stocks have outperformed the OE stocks on the back of strong double-digit aftermarket growth since Q4 2017.-250-200-150-100-50050100150200Dec-10Jun-11Dec-11Jun-12Dec-12Jun-13Dec-13Jun-14Dec-14Jun-15Dec-15Jun-16Dec-16Jun-17Dec-17Jun-18Dec-18Mar-17Jun-17Sep-17Dec-17Mar-18Jun-18Sep-18Boeing1%1%2%17%8%15%15%GE17%13%18%6%16%23%20%Honeywell5%5%7%8%4%4%6%Meggitt3%2%4%6%8%14%9%MTU Aero Engines8%8%9%13%9%11%15%Pratt&Whitney7%4%11%25%18%12%9%Rockwell Collins2%18%2%18%13%-2%8%Safran18%0%15%12%16%9%19%TransDigm-2%5%4%10%15%8%6%UTC Aerospace Systems12%7%11%10%16%12%12%Woodward12%31%15%23%29%19%18%Average8%9%9%13%14%11%12%Barclays|Aftermarket Update 18 January 2019 6 FIGURE 9 Commercial Aero Aftermarket Stock Relative Performance vs.OEM Aftermarket stocks have outperformed OE stocks in recent months Source:Thomson Reuters.Note:OEM includes BA/Airbus/SPR/HXL.AM includes TDG/Safran/MTU.We estimate the aftermarket stocks on average now trade at a 20%premium to OE stocks.FIGURE 10 Commercial Aero Aftermarket Stock Premium vs.OEM on Forward P/E Aftermarket stocks are currently trading at a 20%premium to OE Source:Thomson Reuters.Note:Based on consensus estimates.OEM includes BA/Airbus/SPR/HXL.AM includes TDG/Safran/MTU.Impact of Fuel Movements on Aftermarket After increasing significantly off the 2016 bottom,the recent pull back in oil and jet fuel prices has squelched concern with regard to the potential impact on the aftermarket.60708090100110120130Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Jul-18Oct-18Jan-19-40%-30%-20%-10%0%10%20%30%Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19Barclays|Aftermarket Update 18 January 2019 7 FIGURE 11 Jet Fuel Price(2019$/Gallon)Source:St.Louis Fed While it would seem straightforward enough that higher fuel would be negative for the aftermarket,our work would only indicate a relatively weak relationship between the change in the price of jet fuel and the rate of aftermarket growth.FIGURE 12 Quarterly(YOY)Jet Fuel Price Change vs.Commercial Aftermarket Growth Source:St.Louis Fed,company reports and Barclays Research Flight Hours and the Aftermarket Our analysis of global airline flight schedules indicates flight hour at 6%in Q1 2019,continuing what has been an extended period of strong flight hour growth since 2015.$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00Jan-01Jan-02Jan-03Jan-04Jan-05Jan-06Jan-07Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Jan-14Jan-15Jan-16Jan-17Jan-18Jan-19y=0.08x+0.04R=0.11-20%-15%-10%-5%0%5%10%15%20%25%-80%-60%-40%-20%0%20%40%60%80%100%Commercial Aftermarket GrowthJet Fuel(YOY Price Change)-1 Quarter LagBarclays|Aftermarket Update 18 January 2019 8 FIGURE 13 Seasonally Adjusted Quarterly Flight Hours(M)Flight hours have grown at 6%CAGR since 2014 Source:Diio and Barclays Research In order to forecast flight hour growth,we break it into two components:fleet growth and daily utilization.We estimate that the fleet has grown by 35%since the financial crisis while daily aircraft utilization has increased nearly 20%.FIGURE 14 YoY Fleet Growth(R12M Average)FIGURE 15 R12M Average Daily Fleet Utilization(Hours per Day)Source:Flight Global and Barclays Research Source:Diio,Flight Global and Barclays Research A period of high new aircraft delivery growth in 2011-14(e.g.787s)led to a corresponding high rate of growth in the installed base of in-warranty aircraft.100120140160180200220240Mar-07Sep-07Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12Mar-13Sep-13Mar-14Sep-14Mar-15Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19+4%CAGR+5%CAGR-2%CAGR+3%CAGR+6%CAGR1%2%3%4%5%Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12Mar-13Sep-13Mar-14Sep-14Mar-15Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-197.07.58.08.59.0Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12Mar-13Sep-13Mar-14Sep-14Mar-15Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19Barclays|Aftermarket Update 18 January 2019 9 As a result,in-warranty aircraft came to account for a larger proportion of total flight hours,which weighed on the aftermarket from 2012-2017.However,underlying fleet dynamics have now shifted as these same aircraft age beyond their initial warranty period(five years).As a result,we estimate that growth in the fleet of out-of-warranty aircraft significantly accelerated in 2018 and will continue to grow at a relatively high 4%rate annually in 2019-21.FIGURE 16 YOY New Aircraft Delivery Growth High levels of new aircraft deliveries in 2011-14 drove a higher proportion of in-warranty flight hours Source:Company reports and Barclays Research FIGURE 17 In-warranty Proportion of Total Flight Hours In warranty flight hours are now shrinking as a percentage of the total Source:Diio,Flight Global and Barclays Research-5%0%5%10%15%20%2007200820092010201120122013201420152016201720182019E2020E33%34%35%36%201120122013201420152016201720182019E2020EBarclays|Aftermarket Update 18 January 2019 10 Within the out-of-warranty fleet,we estimate the shift in growth of the mid-life(6-15 year old)aircraft to be most dramatic as this fleet was flat in 2015-17 while we estimate it will grow 5%+on average in 2019-21.The next few years stand to be the first time that the 6-15 year old fleet and overall 6+fleet has grown at strong rates together since 2005-07.The aircraft that are 6-15 years old generate the largest portion of available flight hours given the size of the installed base combined with high utilization rates and are therefore key to the aftermarket.The change in fleet dynamics is best illustrated by looking at individual aircraft models including the 787,which began to deliver in significant volumes in 2013-14.We estimate that 500 aircraft will age beyond five years old over the next several years.FIGURE 18 In-warranty vs.Out-of-warranty Fleet Growth Out-of-warranty flight hours are growing well above the rate of the last several years Source:Flight Global and Barclays Research FIGURE 19 Fleet Growth by Age Group The mid-life fleet is key to the aftermarket Source:Flight Global and Barclays Research 0%1%2%3%4%5%6%7%2010201120122013201420152016201720182019E2020E2021E0-56+-1%0%1%2%3%4%5%6%2010201120122013201420152016201720182019E2020E2021E6+6-15Barclays|Aftermarket Update 18 January 2019 11 FIGURE 20 787s Out-of-warranty Large numbers of 787s are aging out-of-warranty Source:Flight Global,Company reports and Barclays Research We also estimate that an increasing portion of the large A320ceo Family(CFM56 and V2500)and 737NG(CFM56)will age beyond five years old over the next several years.FIGURE 21 A320ceos 6-15 Years Old FIGURE 22 737NGs 6-15 Years Old Source:FlightGlobal,Company reports and Barclays Research Source:FlightGlobal,Company reports and Barclays Research In 2018,we estimate that airlines utilized their newer,in-warranty aircraft at a lower rate,with correspondingly higher utilization of older,out-of-warranty aircraft.We assume that this reverses somewhat in 2019.0100200300400500600201720182019E2020E2021E2022E20%25%30%35%40%45%50%55%60%65%70%05001,0001,5002,0002,5003,0003,5004,0004,5005,000201420152016201720182019E2020E2021E2022E6-15 Yr Old A320ceos%of A320ceo Fleet25%30%35%40%45%50%55%60%65%70%05001,0001,5002,0002,5003,0003,5004,0004,500201420152016201720182019E2020E2021E2022E6-15 Yr Old 737 NGs%of 737 NG FleetBarclays|Aftermarket Update 18 January 2019 12 FIGURE 23 YOY Change in Aircraft Utilization(Hours/Day)Utilization of older aircraft is outgrowing young aircraft Source:IATA,Diio,Flight Global and Barclays Research Overall,we estimate in-warranty utilization is running consistently at 9.5 hours per day as compared to out-of-warranty utilization,which has increased to 8+hours per day.FIGURE 24 R12M Average Daily Fleet Utilization(Hrs/Day)-In-warranty vs.Out-of-warranty Daily out-of-warra