December 12, 2017 / 11:22 AM / 8 months ago

BUZZ-JPMorgan bullish on U.S. aero and defense stocks for 2018

** JPMorgan sees positive returns for aerospace and defense companies in 2018 on solid fundamentals and valuations that are still reasonable vs. elevated multiples across the market

** JPM expects U.S. defense budgets to grow mid-single digits in 2018

** JPM raises Northrop Grumman Corp to “overweight;” cuts Raytheon Co to “neutral,” General Dynamics Corp and TransDigm Group Inc to “underweight”

** Says demand risk revolves around macro developments like emerging market growth, access to capital for operators and lessors, the dollar, and fuel prices

** JPM names Boeing Co and Bombardier as its top aero picks and highlights Northrop and L3 Technologies Inc in defense

** Sees more moderate returns for the sector next year, with 12-month upside of 15-20 pct for most “overweight”-rated mid/large cap stocks and nearly 10 pct for “neutrals” and “underweights”

** Sees Asia as the linchpin of global growth - 1/3 of traffic and near double-digit growth (Reporting by Geetha Panchaksharam)

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