‘Cleared for Takeoff’: Truist Suggests 2 Aerospace Stocks to Buy Ahead of Earnings

Earnings season is in full swing, and investors are on the hunt for opportunities. One place where optimism is building – both on Wall Street and across the tarmac – is the aerospace sector. With commercial air travel rebounding and defense spending holding steady, several industry players appear well-positioned to deliver strong quarterly results.

Reinforcing this upbeat outlook, Truist analyst and aerospace expert Michael Ciarmoli believes investors should buckle up and prepare for takeoff. The analyst sees promising momentum in small- to mid-sized aerospace names ahead of their earnings reports. He highlights encouraging data points, such as year-over-year delivery increases from Boeing and Airbus – the world’s leading aircraft manufacturers – as well as continued robust demand from the U.S. Department of Defense.

“Heading into 2Q25 earnings season we generally have a positive view of the demand backdrop across all A&D sub-sectors — comm’l aero aftermarket, comm’l aero OEM, and defense… We believe quarterly results will be solid and firmly anticipate that 2025 outlooks can be lifted. Our degree of confidence is highest in the aero aftermarket followed closely by aero OEM which seems poised to benefit from higher MAX and LEAP rates in the coming months,” Ciarmoli noted.

With that setup, Ciarmoli has his eye on two small-cap aerospace stocks he believes are especially well-positioned heading into earnings. A quick scan through the TipRanks database shows that these are still flying under the radar, with Ciarmoli among the few analysts covering them. Let’s dive in and see what makes these compelling choices.

Astronics Corporation (ATRO)

First up is Astronics, a $1.2 billion aerospace tech player that’s been quietly powering the skies since 1968. Known for pushing the envelope on innovation, the company has carved out a strong niche in advanced support systems for commercial, business, and military aircraft. From cockpit lighting to power distribution and connectivity solutions, Astronics is embedded in the high-tech backbone of modern aviation.

Its expertise shines, literally, in the cockpit, where it supplies lighting systems for instrument panels, as well as illumination for cabins and aircraft exteriors. The company also delivers integrated electrical power systems, including those tucked into passenger seating.

Along with the lighting and power systems, Astronics provides products and solutions for connectivity and data systems, an increasingly important niche in the aircraft industry. Data systems allow aircraft cockpits to link with commercial and military applications; ‘smart’ sensing systems provide the information that data systems require; in-flight entertainment and connectivity are becoming ever more important for commercial carriers; and all of these are tied together by integrated engineering for turnkey solutions. Astronics backs up all its work with solutions for aircraft safety systems, ranging from onboard safety and survival kits to enhanced vision systems that allow flight crews to navigate in all conditions.

Astronics works with customers across the civilian and military aviation sectors, and is known as a provider of unique or specialty technology products in various experimental aircraft programs. In a recent example, the company has been named as the supplier of the frequency converter unit for the NASA–Boeing X-66 experimental demonstrator airliner.

We’ll see Astronics’ second-quarter results on August 6, but for now we can look back at the Q1 results. In the first quarter of this year, Astronics reported total sales revenue of $205.9 million. This was up more than 11% year-over-year, and it beat the forecast by $14 million. Sales in the key aerospace segment were up 17% y/y and hit a record level of $191.4 million. At the bottom line, Astronics had an EPS of $0.26, based on quarterly net income of $9.5 million. Looking ahead, Astronics finished the first quarter with a record-level work backlog of $673 million.

Turning to Truist’s Michael Ciarmoli, we find the analyst upbeat on this stock, noting that the company will see additional business as Boeing recovers from its own woes and increases production of the 737 MAX airliner series.

“We view ATRO as a beneficiary of ramping MAX production and see total MAX annual revenues tracking to 8-10% of total revenues in the 26/27 time period. We expect management will be in position to maintain its current 2025 revenue outlook of $820-$860M which contemplates potential downside pressures from tariffs and related uncertainty. While we have not made any changes to our model we believe we have seen enough tangible evidence in recent commercial aero bookings, top line revenue growth, and importantly aerospace segment margins that we believe this financial performance will continue for the remainder of 2025 and into 2026. With a higher degree of confidence in our margin and growth assumptions we believe ATRO’s sharply discounted,” Ciarmoli opined.

Ciarmoli puts a Buy rating on this stock, backing that with a $49 price target that indicates potential for a 42% upside in the coming months. (To watch Ciarmoli’s track record, click here)

You can file the stock firmly in the ‘under the radar’ camp, as Ciarmoli aside, there are currently no other analysts covering this name. (See ATRO stock forecast)

TAT Technologies (TATT)

The second Truist pick we’re looking at is TAT Technologies, a smaller player with a $420 million market cap. TAT has a global footprint, and is a provider of critical systems like thermal controls, APUs, and landing gear for a wide range of aircraft platforms.

Among TAT’s key product lines are its thermal solutions. This is a vital area for aircraft technology; at high speeds and altitudes, aircraft encounter extremes of both heat and cold. TAT’s industry-leading thermal solutions include high-temperature-resistant precoolers, fuel-submerged hydraulic heat exchangers, oil coolers, advanced cold plates, air cycle and vapor cycle ECS heat exchangers, power electronics cooling systems, and environmental control systems. These systems regulate temperature across the aircraft, from the fuel system to passenger accommodations.

Also vital to the industry is TAT’s expertise in APU MRO – the maintenance, repair, and overhaul of auxiliary power units. These APUs are found in most aircraft, and are used to provide power for systems other than propulsion. In commercial airliners, the APU is usually located in the tailcone and is used to provide power for cabin electricity and lighting, and for the aircraft’s communication systems. TAT is also a leading provider of MRO facility for Embraer landing gear. Embraer is one of the world’s largest makers of commercial airliners, after Airbus and Boeing, and specializes in medium-haul, narrow-body jets. TAT’s expertise in Embraer landing gear systems is in high demand.

The company also operates at the leading edge of aerospace technology. TAT is involved in eVTOL projects – electric vertical take-off and landing – a new tech that promises to bring a sea-change to short-range and urban air transport. Closely linked to this is TAT’s work with hybrid electric aircraft and universal cooling systems.

So, TAT has its fingers in many areas of the aerospace realm. That brought the company $42.1 million in revenue during 1Q25, a total that was up 23% from the prior-year period although it missed the forecast by $452,000. TAT’s bottom line in the quarter came to 34 cents per share, beating expectations by 4 cents per share.

For Ciarmoli, the future looks bright for this aerospace firm. The analyst notes a strong market for APU expertise, and writes of TATT, “We expect favorable aftermarket trends coupled with recent APU share gains to continue to drive revenue growth. We model for 22% YOY growth in 2Q25 and 6 % seq’l growth. We would expect to see gross margins expand YOY on volume/mix and operating efficiencies and we anticipate a B2B >1x. Following the equity offering at the end of May we will look for updates from mgmt regarding use of proceeds and suspect some near term build of working capital to support the narrow body APU opportunity.”

These comments support the analyst’s Buy rating on TATT shares, and his $35 price target suggests a 9% upside potential in the next 12 months.

While there are only 3 recent analyst reviews on record for TATT, they are all Buys, giving the stock its Strong Buy consensus rating. The shares have a current trading price of $32 and an average target price of $36 points toward a one-year gain of 12%. (See TATT stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.