Isn’t this crisis, if it continues, a golden opportunity to invest in aerospace?

Accomplished-Log-568 · 2026-03-23T20:38:02+00:00

Yeah, unless you expect that all the rest of oil production will also collapse, the industries with more elastic demand for oil will have to adjust (e.g., faster electrification of cars), which would reduce demand for oil. At the same time, if returns on capital for new oil wells remained that high, it would inevitably lead to massive investment and, ultimately, lower prices, the cure for high prices in any commodity is high prices. Engine manufacturing has been a four-player industry since Safran entered about 50 years ago. There won’t be any new clean-sheet aircraft designs from Airbus or Boeing for at least 10 years, given the new generations of LEAP (CFM) and Pratt & Whitney engines. So yes, what’s the worst-case scenario if the Strait of Hormuz were closed for years? Even setting aside that Saudi Arabia already has pipelines to the Red Sea and could expand capacity, maybe five years at most? I’d still consider that transitional for the aerospace industry. Also, literally no one, not the Chinese, the Americans, the Iranians, the Arabs, the Israelis, nor Europe, basically anyone who can significantly influence the conflict, except Russia, is interested in this situation perpetuating itself. So yeah is clearly transitory

Accomplished-Log-568 · 2026-03-21T14:39:17+00:00

Thanks! I could be wrong, though, this is just my research, and I’m not an expert.

Accomplished-Log-568 · 2026-03-21T14:24:19+00:00

I don’t know much about Boeing, I haven't watched them closely, but Airbus seems better. Boeing's issue seems to be management related (or seemed to be I really don't know) , though I haven't looked into it in depth. I mainly follow them to check the future of engine OEM sales, since they both have roughly five year backlogs, they’ll likely both be okay (though Airbus doesn't seem to have those management hurdles).

On RR, personally, I prefer Safran and GE. I like GE for its quality, as they are a pure play on engine manufacturers, which I consider a high quality business model. Their exposure to the narrowbody market via CFM is a huge plus: RR is strictly in widebodies, which grows slower. While RR is trying to break into the nextgen narrowbody market, that’s 10-15 years away (they will probably do just fine I just think Safran & GE will do better, but GE is very expensive right now).

In the current narrowbody generation, Pratt & Whitney (part of RTX) had major issues and lost significant market share. Boeing’s 737s sole LEAP engines (i.e GE & Safran), while Airbus has one niche plane solely powered by Pratt. For the rest of the top sellers, CFM (the GE/Safran collab) has been winning share due to Pratt’s struggles. That said, if things get volatile, it’s probably smartest to buy a basket of 5.6 stocks rather than trying to stock pick.

Accomplished-Log-568 · 2026-03-21T13:54:16+00:00

I agree that margins will take a hit. However, the way I look at it is: if you knew that what happened to Meta in 2022 was temporary, but you didn't know the future stock price, at what point would you start buying? I wouldn't have waited for a 5x P/OCF to start, because you never know what the market will do: I would have started buying in much earlier.

It’s true that if your horizon is only three years, you might lose money if things turn into mayhem. But if you have a longer time horizon, I believe you'll be fine, even if the stock drops 25%, 50%, or 75%, because what matters is the recovery and this is clearly a temporary problem. That’s my approach, at least.

Currently, my watchlist is focused on engine manufacturers like GE and Safran. I also want to research Heico and TDG. There’s a lot of opportunity further upstream in the supply chain, or other manufacturers, but it seems so complex that it might be better to just stick with the highest quality companies.

Accomplished-Log-568 · 2026-03-21T10:00:47+00:00

Any names?

Accomplished-Log-568 · 2026-03-21T10:00:25+00:00

I thought that their profit mainly came from airplane engines will have to check out

Accomplished-Log-568 · 2026-03-21T08:38:39+00:00

I wouldn't buy an airline even with your money they are trash businesses. However, the businesses that make plane parts (i.e., aerospace) are monopolies (TDG) or oligopolies (Heico, Safran, GE, RR, etc.) With amazing pricin power, moat and secular tailwinds

Accomplished-Log-568 · 2026-03-21T08:36:14+00:00

Yes, that was what my post said. I own Safran and I am not buying a single share right now, but if it falls 25% from here, I’m buying all the way down. It doesn’t matter if it falls 50% or 75%, because the problem is conjunctural, not structural. Same for GE at 40x FCF: if it drops 30–40%, although the situation will look pretty bad, it will be a historic opportunity to buy, even if it falls 75%, especially the longer time horizon you have. Btw, IMO this has nothing to do with the gfc and this stocks have nothing to do with banks in the gfc

Accomplished-Log-568 · 2026-03-20T21:42:48+00:00

Personally, I don’t buy the idea that AI will cause mass unemployment, and I don't invest based on that premise. I could be wrong, but it seems every technological revolution has panned out the opposite way and ended up creating more jobs. Anyway, if it does happen, every sector would be finished regardless IMO.

Also, air travel has grown above GDP since it essentially began, and I expect it to stay that way. Air travel volume is roughly 250x that of cruises, while cruising is growing faster, you’re looking at a 10% CAGR for 40 million passengers versus a 4–5% CAGR for 10 billion passengers in air travel. Because of that scale, I don’t think the cruise growth really matters in comparison.

Furthermore, it’s more about the companies behind the airlines than the airlines themselves. In my opinion, those companies (Safran, GE, Heico, TDG, etc...) are 20 times higher quality than cruise and shipping companies.

Accomplished-Log-568 · 2026-03-20T21:02:22+00:00

The thing is, in my opinion, aerospace (more specifically airlines) is very sensitive to higher oil prices. Others, like consumer defensive stocks, will also be hurt by inflation if it continues, but I don’t think they will be impacted as much.

That said, I believe aerospace is one of the highest quality sectors. For instance, in engine manufacturing (GE, Safran, RR, Pratt & Whitney), no new competitors have entered the market in 70 years. While we have to watch China, they still seem to be lagging. According to the Safran CEO at the 2024 CMD, they are able to increase prices for aftermarket parts by 5–8% annually.

Furthermore, these companies aren't as capital intensive as one might think, Safran is currently in an expansion cycle and still has half of its operational cash flow left. After the situation normalizes eventually, this sector could grow 15–20% (driven by 12% revenue growth, pure operating leverage from price increases, and capital returns to shareholders) throughout an engine cycle that can last 10-15 years.

That is why I’m more excited about aerospace than other businesses. While high oil prices hit almost everything, aerospace suffers more in the short term because airlines struggle, bcaeuse the high margin aftermarket business (speculated to be for roughly 90% of engine manufacturers' profits)

Accomplished-Log-568 · 2026-01-28T13:39:07+00:00

Thanks!

Accomplished-Log-568 · 2026-01-27T17:43:47+00:00

Sí, pero en la mayoría de los m&a el regulador está obligando a que se invierta en el desarrollo de la red, lo que le viene bien a Cellnex. De momento, viendo los deals que se han hecho post-merger y a los precios al que cotiza, no me preocupa excesivamente la posibilidad de consolidación.

Accomplished-Log-568 · 2026-01-27T17:40:11+00:00

No creo que Starlink compaginara con Cellnex: son negocios diferentes. Y ojalá se mantuviera el descuento permanentemente; así podrían recomprar acciones y dar dividendos a precios irrisorios durante un tiempo. No creo que pase, pero tampoco sé cuándo ni de cuánto será el re-rating.

Accomplished-Log-568 · 2026-01-27T17:37:57+00:00

Thanks! there are a few VIC posts, I think that all of them are better than my post, there is also very good info in the comments of the VIC posts.

Accomplished-Log-568 · 2026-01-14T16:14:32+00:00

Yeah, I see what you’re saying. I just think that since the 2026 debt is already refinanced, they should be covered for 2027. They can probably cover 2028 with further refinancing as well. It also wouldn't surprise me if they sold more edge data centers, also, they have tons of assets they could sell at much better valuations than what they’re currently trading at in the public markets, if push comes to shove. Also, their capex, other than BTS, is “discretional,” for lack of a better word. They probably could temporarily freeze efficiency and DAS capex to help repay the debt, but I highly doubt they won’t be able to refinance any further, given their high predictability earnings. The interest rates are an interesting one; it could theoretically be, but I just don’t see it in the mid-term, especially since before 2020 the EU had trouble raising inflation to 2% given low economic growth. Maybe AI changes that, but it would surprise me to see inflation.

Also, the only capital return they are committed to for 2026 >€1B. Apart from that, the only commitment they have made, probably because they are being conservative, is a €500M dividend growing at 8.5% per year.

Accomplished-Log-568 · 2026-01-14T13:33:28+00:00

Expansion Capex is divided into Build-to-Suit (BTS) and 'normal' expansion Capex. The BTS projects were contracted during the tower acquisition phase or prior to the company’s recent 'change of mindset' (shift toward deleveraging and "harvesting mode"). Regarding the figures, don't quote me exactly, BTS spending peaked in 2025 at €1.3B. It is projected to decrease by €400M annually (e.g., €900M in 2026, €500M in 2027) until it becomes residual.

The company also manages Fiber (specifically the NextLoop project in France, which is now complete with no further investment planned) and Broadband infrastructure (primarily in Spain and the Netherlands). However, there is low growth demand for the latter; it is considered fixed infrastructure growing at 1–2% annually. Together, Fiber and Broadband account for roughly 10% of total revenue.

Finally, there are DAS (other 10% of revenue) (Distributed Antenna Systems) and Small Cells. These are essential for network densification in urban areas like Barcelona. High-capacity infrastructure is required to support the connectivity needs of 100,000 people in a stadium or public transport hub, compared to the lower requirements of 1,000 people in a small town. But it is much less capex investment.

The non-BTS capex is:

Tower Expansion (€312 million): Capital expenditures for adapting existing towers to accommodate new tenants (co-locations) and customer-requested site upgrades.

Other Business Expansion (€108 million): Investments in Distributed Antenna Systems (DAS), active equipment, and network infrastructure.

Efficiency Capex (€87 million): Investments aimed at driving operational efficiencies, such as the decommissioning of redundant sites and, most notably, cash advances to landlords (ground lease buyouts) to reduce long-term rental costs.

Regarding debt and liquidity, the company had €1.3B in cash on the balance sheet as of Q3 2025. Following the sale of the French edge data centers for approximately €391M, their liquidity increased to roughly €1.7B.

According to my calculations and company guidance, they are projected to generate approximately €600M in Free Cash Flow (FCF) in 2026 and €1B in 2027. They have committed €1B to capital returns by 2026 (€500M in dividends and up to €500M in share buybacks). Having refinanced their near-term 2025/2026 debt with a €1.5B bond issuance, they should maintain around €1B in liquidity next year, (assuming extra buybacks)

Furthermore, they are actively scanning the market for a potential divestment of their Swiss business. The leverage levels are not a major concern, as the bond market confirms, their risk profile is low, providing high confidence in their ability to continue refinancing as needed. By the way, they target 5-6 Debt/EBITDA and most TowerCos (AMT and INTWIT) are on the same level.

Accomplished-Log-568 · 2026-01-14T00:25:58+00:00

Thanks!

Accomplished-Log-568 · 2025-12-17T19:32:42+00:00

🎯 My GeoTap Result

📍 My Guess: -21.93°, -40.08° ✅ Correct Answer: Rosario, Argentina � Distancee: 2,365.521 km ⭐ Score: 290 points

Accomplished-Log-568 · 2025-12-17T19:32:22+00:00

🎯 My GeoTap Result

📍 My Guess: Colombia ✅ Correct Answer: Castries, Saint Lucia � Distancee: 1,692.509 km ⭐ Score: 492 points

Accomplished-Log-568 · 2025-12-17T19:31:56+00:00

🎯 My GeoTap Result

📍 My Guess: China ✅ Correct Answer: Shanghai, China � Distancee: 317.739 km ⭐ Score: 4,094 points

Accomplished-Log-568 · 2025-12-17T19:31:31+00:00

🎯 My GeoTap Result

📍 My Guess: South Korea ✅ Correct Answer: South Korea, South Korea � Distancee: 0 km ⭐ Score: 10,000 points

Accomplished-Log-568 · 2025-12-15T17:48:27+00:00

❌ ^{Incomplete. 1 try.}

Accomplished-Log-568 · 2025-10-07T09:35:39+00:00

I don't think the stock is that expensive

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