Analysts at RBC Capital Markets say investors should watch aerospace aftermarket and defense businesses closely as first-quarter results start rolling in on April 21. RBC expects solid performance in defense and in aftermarket aviation services, while anticipating more mixed outcomes from original equipment manufacturers in aerospace.
Broader outlook
RBC notes several constraints that could limit upward revisions for aerospace stocks, including elevated fuel prices and ongoing supply-chain uncertainty. On the defense side, the bank points to uncertainties around the timing of contract awards and the pace of production increases as potential sources of volatility for shares in that sector.
Northrop Grumman (NOC)
RBC highlights Northrop Grumman as positioned to gain from a brighter outlook for the B-21 bomber and related funding. The firm raised its organic growth assumptions, boosting the Aeronautics estimate to 6% from 2% and its Defense Systems estimate to 6% from 3%. At the same time, RBC increased its adjusted earnings-per-share estimate for the quarter to $6.01 from $5.87.
RBC analysts say a strong first-quarter print could prompt Northrop Grumman to raise its full-year 2026 guidance. Their list of specific monitoring items includes the planned ramp of B-21 investment, recent momentum in the Sentinel and CCA programs, and what they describe as an improved munitions outlook amid the conflict in Iran. RBC also observes that consensus estimates on Northrop Grumman are at or above the high end of the company guidance ranges, which could constrain upside surprises.
Since RBC’s comments, Northrop Grumman reported first-quarter 2026 results that exceeded analyst expectations, logging revenue of $9.88 billion and adjusted earnings per share of $6.14. After that release, TD Cowen lowered its price target on the company’s shares but kept a Hold rating.
Raytheon Technologies (RTX)
RBC favors Raytheon Technologies for the strength it expects in the Raytheon business and across parts of its aerospace operations. The firm lifted its organic growth forecast for Collins to 9% from 8% and for Pratt & Whitney to 7.5% from 5.3%, citing anticipated aftermarket strength as the driver.
RBC points out that consensus revenue estimates of $93.5 billion sit ahead of company guidance of $92 billion to $93 billion, and believes this sets the stage for RTX to raise its full-year 2026 guidance. RBC retains an Outperform rating on the shares and a $230 price target, which it derives from applying a 28-times multiple to its 2028 free cash flow estimate of $11.2 billion.
In recent reporting, RTX posted strong first-quarter 2026 results, beating both revenue and earnings forecasts with adjusted EPS of $1.78. The company’s Pratt & Whitney segment disclosed investments of more than $100 million to increase engine production capacity in Poland and an additional $100 million for U.S. maintenance facilities.
Safran
RBC maintains an Outperform rating on Safran, with a €400 price target. The firm raised its estimate for first-quarter aerospace propulsion services growth to 21%, a revision driven by stronger-than-expected spare parts growth of roughly 23%.
Analysts at RBC attribute much of Safran’s upside to continued strength in the legacy engine aftermarket and ongoing demand for engine maintenance, repair and overhaul services. RBC also suggests Safran may be benefitting from customer behavior such as spare-parts pre-buying in response to persistent supply constraints and concerns about parts availability disruptions.
What to watch and concluding notes
As the earnings season opens, RBC’s work highlights that aftermarket services and defense programs are the primary areas of expected outperformance, while original equipment manufacturers in aerospace face more uneven prospects. Investors should monitor company guidance versus consensus, the impact of fuel prices and supply-chain developments on revision cycles, and the timing and scale of defense contract awards and production ramps.