I was a little early in calling the bottom for Carpenter Technology (CRS) in my August article, and if it weren’t for a big jump on a sell-side upgrade, the shares would be down more than 20% from that last update. Still, I’m going to argue that that was a premature call, not an intrinsically wrong one, and I continue to believe that Carpenter offers good leverage to an improving aerospace cycle, as well as longer-term leverage to some other attractive advanced-tech opportunities.
More than 40% of Carpenter’s revenue comes from the aerospace sector, and both Airbus (OTCPK:EADSY) and Boeing (BA) are expected to accelerate production of their respective lead narrowbody programs this year (the A320 and MAX), with widebody acceleration more of a 2024 driver. I see upside to around $50 right now, but investors should be careful not to get too attached to the shares – while management has taken meaningful steps to improve profitability in the up-cycles and diversify the revenue base, this isn’t a stock you’ll want to own when the aerospace cycle fades.
Read the full article at Seeking Alpha:
As Aircraft Production Accelerates, Carpenter Technology Shares Should Go For A Ride
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