TD Cowen Says De-Rating In Aerospace Stocks Has Been ‘Disorderly,’ Cuts Targets On Boeing, Lockheed Martin Among Others

The firm reduced its price targets on five aerospace and defense stocks ahead of earnings, as part of its third-quarter earnings preview for the sector.

• TD Cowen cut its price target on L3Harris Technologies to $280 from $370, while maintaining a 'Buy' rating.
• The firm reduced its Lockheed Martin price target to $570 from $600 and maintained a 'Hold' rating.
• TD Cowen expects missile framework agreements and ship contracts to boost backlogs at select defense companies.

TD Cowen lowered its price targets on Boeing (BA), General Dynamics (GD), Howmet Aerospace (HWM), L3Harris Technologies (LHX) and Lockheed Martin (LMT) on Friday as part of its third-quarter earnings preview for the aerospace and defense sector, according to The Fly.

BA shares rose 1.16%, GD gained 1.18%, and HWM climbed more than 1% and LHX traded marginally lower , while LMT fell 0.30% at the time of writing on Friday.

TD Cowen Lowers Targets On Five Aerospace, Defense Stocks

According to The Fly, analyst Gautam Khanna lowered the price target on Boeing to $240 from $250, General Dynamics to $380 from $420, Howmet Aerospace to $280 from $320, and L3Harris Technologies to $280 from $370. The firm maintained 'Buy' ratings on all four stocks.

For Lockheed Martin, TD Cowen cut its price target to $570 from $600 while maintaining a 'Hold' rating, The Fly reported.

Why TD Cowen Sees Potential Opportunities

Khanna described the recent de-rating in aerospace stocks as “disorderly,” saying it could create investment opportunities, according to The Fly.

The firm also expects missile framework and ship contracts to bolster backlogs at select defense companies. Backlog represents orders and contracted work that a company has yet to fulfill, though funding status, cancellation terms, and revenue recognition timing can vary.

What Company Backlogs Show Ahead Of Q3 Earnings

Recent company results show substantial contracted work across the aerospace and defense group.

L3Harris reported a record $42 billion backlog in the second quarter, following $7.3 billion in orders and a 1.2x book-to-bill ratio. Revenue rose 8% year over year to $5.9 billion, and the company raised its full-year 2026 revenue and adjusted earnings guidance.

L3Harris is scheduled to report third-quarter results before the market opens on October 29. According to Fiscal AI, analysts expect L3Harris to report third-quarter revenue of approximately $5.865 billion and earnings per share (EPS) of $3.22.

Boeing reported second-quarter (Q2) revenue of $24.6 billion, up 8% year over year, while its total company backlog reached a record $715.3 billion, including more than 6,200 commercial airplanes. The company delivered 171 commercial aircraft during the quarter. Boeing is scheduled to report third-quarter results on October 27. According to Fiscal AI, analysts expect third-quarter revenue of approximately $25 billion and a loss of $0.02 per share.

General Dynamics reported Q2 revenue of $14.1 billion, up 8.1% year over year, and diluted EPS of $4.24, up 13.4%. Orders totaled $20 billion, with a company-wide book-to-bill ratio of 1.4x, while backlog stood at $136.5 billion at quarter-end. General Dynamics is expected to report third-quarter results on October 30. According to Fiscal AI, analysts expect third-quarter revenue of $13.47 billion and EPS of $4.50.

Lockheed Martin reported Q2 sales of $20.1 billion, up from $18.2 billion a year earlier, and net earnings of $1.8 billion, or $7.94 per share. The company received $65 billion in new orders during the quarter, bringing its backlog to a record $230.4 billion, including a multiyear contract to produce THAAD interceptors. Lockheed Martin is expected to report third-quarter results on October 22. According to Fiscal AI, analysts expect third-quarter revenue of $20.44 billion and EPS of $7.43.

BA, GD, LMT, LHX, HWM: Retail View

Retail sentiment on LMT and HWM remained ‘Bearish,’ with ‘Normal’ message volumes. Sentiment on GD remained ‘Bullish,’ while BA and LHX continued to trade in ‘Neutral’ territory.

Shares of LHX and BA have fallen more than 20% and 12%, respectively, year to date, while GD shares have declined over 3%. In contrast, LMT shares have gained more than 5%, while HWM shares are up over 6% over the same period.

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