Goldman Sachs is divvying up the aerospace and defense stocks.
Analysts at the firm added Boeing and Raytheon Technologies to its conviction buy list and removed L3 Harris and Lockheed Martin, though kept both buy rated. The move was predicated on expected upside for companies exposed to commercial air travel over more defense-focused names.
Not all investors are as sold on Boeing. Boris Schlossberg, managing director of FX strategy at BK Asset Management, said it's still too early to jump back in.
"I understand the desire to bottom fish with Boeing, but I think it's way, way too premature and in fact, I really prefer RTX [Raytheon] over Boeing any day of the week," Schlossberg told CNBC's "Trading Nation" on Monday.
Raytheon has fallen 33% this year, while Boeing has plummeted 52%. Both are lower this month.
Boeing "faces a huge amount of idiosyncratic and other risk from a macro point of view. The Covid story is still not over. And the demand for flight is still very, very tepid as far as we go. Furthermore, the second wave of infections in Europe is going to cast a very strong pall on international travel for a while. All of that creates a very serious headwind for Boeing," said Schlossberg.
Ari Wald, head of technical analysis at Oppenheimer, is bearish on the entire group, preferring machinery stocks within the industrial sector. However, there is one name that could start to break out from a technical basis.
"I really wouldn't bet on any, but there's always going to be an outperformer versus the industry," Wald said during the same "Trading Nation" segment. "The one that stands out would be L3 Harris."
Wald said L3 Harris has entered an inflection point where its long-term uptrend versus the ITA aerospace and defense ETF has resumed. He expects the stock to continue to outperform the group.
L3 Harris shares have fallen 9% this year, far better than the nearly 30% drop for the ITA ETF. The stock is up 6% this quarter, while the ITA ETF has declined 3%.