Turbulence in the bizjet market appears to be easing and President-elect Donald Trump maybe poised to help the industry fly high again.
"The Trump win looks positive for bizjet demand," Cowen analyst Cai von Rumohr said in a research note Wednesday. He expressed optimism that Trump's policies might create "economic stimulus from an expected lower tax rate and less regulation."
The Cowen analyst also said the "shift away from Obama's anti-bizjet rhetoric" should help the bizjet market. The corporate jet market has been soft for many years and new jet deliveries remain below the 2007-2008 peak.
The negative perception of corporate jets came during the Great Recession when Detroit execs traveled to Washington on private jets asking for bailout money.
Indeed, Deutsche Bank said this month sentiment has bottomed in the bizjet sector and it contends that Trump as a bizjet owner "should go a long way in breaking the stigma for corporate jets."
Trump's private Boeing 757 airplane reportedly cost $100 million and is outfitted with 24-karat gold fixtures.
One sign of the rebound is the used market for General Dynamics' newest bizjet, the G650. The latest check by UBS this week showed there's 14 G650s for sale, below the peak of 18.
"Our survey of industry professionals indicates significant positive momentum post the electon," UBS analyst David Strauss said in a note this week.
Shares of General Dynamics, known for its Gulfstream corporate jets and defense business, are up more than 26 percent so far this year. That beats the performance of its aerospace and defense peers Boeing, Lockheed Martin, Northrop Grumman and Raytheon.
The G650, priced at $65 million, may be the flagship plane of the Gulfstream business but two other large-cabin business jets it is adding to the portfolio — the G500 and G600. The G600 is expected to have potential delivery in 2018 while the G500 is projected to enter service next year.
Textron also is exposed to the bizjet market with its Cessna, Sovereign and Latitude planes, and the newer Longitude.
According to Cowen, Textron's "mainstay U.S. owner/operator small business customers should benefit disproportionately from a tax cut." Moreover, Cowen believes "trade conflict risk looks tolerable since competitors Embraer & Bombardier could face entry tariffs on bizjets/parts imported to the U.S."
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