Should You Invest in Aerospace & Defense ETFs After Q3 Earnings?
Zacks Investment Research | Nov 04, 2020 04:59AM ET
The airline sector has been one of the worst-hit spaces due to the coronavirus outbreak. The virus’ spread resulted in declining air travel, with restrictions imposed by the government. Consequently, airlines’ top lines suffered a material impact as passenger revenues accounts for a significant amount of their total revenue base. In fact, with the pandemic showing almost no signs of waning, air travel demand is likely to remain sluggish, at least in the near term. Studying the stressed balance sheets of the carriers, it will be safe to say that the space is likely get a boost from vaccine development and introduction of another round of fiscal stimulus.
The pandemic has also impacted operations of major players in the defense sector as well. Some defense manufacturers had to either temporarily close production or were operating with a constricted workforce. Moreover, deliveries of finished products were largely affected by travel restrictions and social-distancing measures. However, Trump’s generous defense budget might have provided some cushion to the space from the pandemic-induced losses.
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