January 16, 2018 / 4:17 PM / 7 months ago

BUZZ-Aero/Defense: Wells Fargo upgrades Northrop Grumman, downgrades Lockheed Martin

** In its 2018 aerospace/defense sector outlook note, Wells Fargo upgrades Northrop Grumman Corp, Curtiss-Wright Corp and Spirit AeroSystems Holdings Inc to “outperform” from “market perform”

** But broker downgrades Lockheed Martin Corp and Rockwell Collins Inc to “market perform” from “outperform”

** Shares of NOC, CW, SPR up 1 pct to 4 pct early Tues while LMT and COL both down <1 pct

** Lead analyst Sam J. Pearlstein sees 2018 commercial aerospace production continuing to grow

** And in the defense space, prefers stocks with stronger organic growth and margin opportunities

** On the heels of tax reform, Pearlstein expects to see tax rate reduction in the range of 8-12 percentage points for large defense contractors

** Thomson Reuters StarMine gives Pearlstein 2 of 5 possible stars for past aero/def analysis

** In the last 12 months, the S&P 500 Aerospace & Defense index has gained >47 pct, outshining the broader S&P 500’s ~23 pct advance (Stephen Culp)

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