The 'golden age' of airplane engines is just getting started. These are the stocks to play, says JPMorgan.

By Barbara Kollmeyer

Safran shares climb after strong results

Morocco's King Mohammed VI attended a launch ceremony for French group Safran, which reported upbeat results on Friday.

Investors have been increasingly drawn to aerospace and defense-sector stocks as the U.S. and other countries have moved to beef up security. According to JPMorgan, the "golden age" is under way for one subset: aero engines.

Backing analysts' point were results from Safran (FR:SAF), which boosted shares by more than 7% on Friday. The French aircraft-engine and design manufacturer lifted its 2026 outlook, citing an "outstanding" past year for its business.

Rising in step with Safran were rivals Rolls-Royce (UK:RR) up 3%, BAE Systems (UK:BA), while U.S. rivals GE Aerospace (GE) rose 2.6% and RTX (RTX) shares were flat.

However, a team of analysts led by David Perry said Safran, GE Aerospace and RTX remain their favorites in a subsector that they suggested investors overweight, citing supportive recent results and commentary from those aero engine makers.

Safran forecast 2026 revenue rising to low to midteens and recurring operating income of EUR6.1 to EUR6.2 billion ($7.2 billion to $7.3 billion), the latter of which JPMorgan analysts said was 2% better than consensus. Safran also forecast cash flow of EUR4.4 to EUR4.6 billion, about EUR300 million better than forecast, said the analysts.

"2025 was an outstanding year for our business, highlighted by record passenger traffic and growing momentum in defense activities. In a complex environment, Safran achieved unprecedented aftermarket revenues and LEAP engine production, both supported by improvements in the supply chain," CEO Olivier Andriès said in a press release.

Adjusted revenue rose 15% versus a year ago to EUR31.33 billion and recurring operating income climbed 26% to EUR5.2 billion. Analysts polled by Visible Alpha were forecasting revenue of EUR31.4 billion and income of EUR5.2 billion.

Perry and his team listed some reasons to love the sector. First, aircraft retirements have stayed low since 2015-16, due in part to fewer aircraft coming out of Boeing (BA) and Airbus (FR:AIR) and a high number of grounded geared turbofan aircraft.

"As a result of this shortage of new/young planes, the remaining fleet is being flown harder and kept in service for longer," driving strong aftermarket demand in the aero-engine segment, Perry and his team said in a note to clients on Friday.

They also pointed to "attractive" price rises on spare parts over the next year, something that few global industrials or subsectors of those can keep imposing. Forecasts for deeper engine repairs and overhauls by airlines trying to keep older planes flying amid a shortage also bode well for aftermarket sales of those companies, said the analysts.

GE Aerospace posted forecast-beating results last month, though investors sold shares, while RTX, the owner of Collins Aerospace Systems and Pratt & Whitney, also reported better-than-expected results.

RTX recently became the latest defense contractor to announce agreements with the U.S. to build more missiles. RTX shares are up 64% over a year, with GE Aerospace up 50% and Safran up 35%.

Read on: Energy is the best-performing sector in the S&P 500 so far this year - and it's not just because of the rise in oil prices

-Barbara Kollmeyer

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