Jefferies’ Top Commercial Aerospace Picks
Jefferies released an analyst note highlighting four companies it believes are best positioned to benefit from rising aircraft production, expanding aftermarket services, and improving profitability in the commercial aerospace sector. The firms selected are Boeing, GE Aerospace, HEICO, and FTAI Aviation.
Boeing (BA)
Jefferies expects Boeing to generate between $1 billion and $3 billion of free cash flow in 2026 and to exceed $10 billion annually as its commercial production normalizes. The outlook is driven by higher 737 MAX output, an increase in 787 deliveries, reduced losses and better profitability in the defense segment, and continued growth at Boeing Global Services. Boeing reported delivery of 60 aircraft in May, a 33% year‑over‑year increase, and is raising its 737 production rate. The company also received an updated delivery schedule from Emirates, which now anticipates its first 777X entering service by mid‑2027.
GE Aerospace (GE)
GE Aerospace is Jefferies’ preferred name for commercial aftermarket exposure. The firm notes that roughly 60% of the profit in GE’s Commercial Engines & Services division comes from aftermarket work. Improvements in LEAP engine economics are occurring faster than expected, legacy CFM56 engines remain highly profitable, and losses on the GE9X program are declining. Future engine programs are expected to add further upside. In a recent development, GE Aerospace signed a Memorandum of Understanding with Wolfspeed to collaborate on silicon‑carbide technology. The company also received new coverage from Seaport Global Securities with a buy rating and an reiterated Outperform rating from RBC Capital.
HEICO (HEICO)
HEICO is highlighted as a strong compounder benefiting from growing adoption of PMA (Parts Manufacturer Approval) replacement components, airlines’ push for lower‑cost alternatives to OEM parts, and expanding demand from government and defense customers. The company announced several acquisitions, including the purchase of Cook Defence Systems and a 90% stake in CalRamic Technologies. HEICO also increased its semi‑annual dividend by 8%, and UBS raised its price target following the strong quarterly performance.
FTAI Aviation (FTAI)
FTAI Aviation is presented as Jefferies’ most aggressive aftermarket idea. The firm combines aircraft and engine leasing, engine maintenance and overhaul, and engine exchange programs. Jefferies forecasts that aerospace products will contribute about 64% of aviation EBITDA in 2026, with leasing operations providing the remaining 36%. Approximately 80% of FTAI’s revenue is tied to aftermarket activity, the highest direct exposure among major aerospace names. For the first quarter of 2026, FTAI reported revenue of $830.7 million, surpassing analyst expectations, although earnings per share fell short of forecasts. Moody’s upgraded the company’s corporate family rating from Ba2 to Ba1, citing a reduction in leverage.
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