Investors weren't exactly sure what to do with shares of a new aerospace & defense supplier. Wall Street has some advice: Buy the stock.
Six banks have recently launched coverage of Applied Aerospace & Defense stock, which completed its IPO in early June. The stock started trading on June 3. Wall Street brokers involved in the deal typically wait a few weeks to launch coverage.
Shares have struggled since the offering, closing Friday at $20.53, just a few cents above the $20 IPO price. Shares traded as low as $17.08 in the days following the deal.
Wall Street is positive, though. The shares picked up five Buy ratings and one Hold.
Applied Aerospace shares were up 1.6% in premarket trading at $20.86, while S&P 500 and Dow Jones Industrial Average futures were up 0.9% and 0.5%, respectively.
Applied Aerospace is a midtier supplier for the aerospace and defense industry. It builds hardware for space launch, including propellant tanks. It also makes hardware for SpaceX's Falcon 9 reusable rocket. Applied supplies components for aircraft that don't go into orbit, including drones, as well as parts for solid-rocket motors that power missiles.
The company is "rebuilding the arsenal of freedom," wrote Baird analyst Peter Arment in a Monday report. He's referring to the WWII era when American manufacturing turned its attention to building weapons to defeat Nazi Germany and its allies. Today, the Defense Department is focused on increasing hardware production again, balancing it with America's leading software and AI capabilities.
"Gone are the days of serial underinvestment across the military-industrial complex, reliance on cost-plus contracting, and about 40% of procurement dollars going to five companies," added Arment. "Applied Aerospace & Defense should be a major beneficiary of rebuilding the Arsenal of Freedom, with a proven track record of delivering high-consequence complex sub-systems at scale."
Along with Baird, BofA, Stifel, RBC, and Jefferies rate shares Buy. Morgan Stanley rates shares Hold, although its target is $23, just a little below the average $25.40 target for the Buy-rated analysts.
There will probably be more ratings, but for now more than 80% rate shares Buy. The average Buy-rating ratio for S&P 500 stocks typically ranges from 55% to 60%. The average analyst price target is about $25, up more than 20% from recent levels.
Write to Al Root at allen.root@dowjones.com
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June 29, 2026 07:55 ET (11:55 GMT)
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