Applied Aerospace & Defense Gets Bullish BofA Securities Call On Space, Missile Demand

Applied Aerospace & Defense Inc. (NYSE:AADX) drew a bullish initiation from BofA Securities, for which analyst Ronald J. Epstein launched coverage with a Buy rating and a $24 price target.

Epstein cited the company’s exposure to rising U.S. and allied defense spending across space, missiles, munitions and next-generation military platforms.

• Applied Aerospace stock is building positive momentum. What’s pushing AADX stock higher?

BofA Cites Defense and Space Demand as Growth Drivers

Epstein considers the company well aligned with national security priorities. These include missile defense, rearmament, next-generation tactical aircraft, Golden Dome, launch vehicles and proliferated space systems.

The analyst highlighted Applied Aerospace & Defense’s strong position in current programs. BofA reported that approximately 86% of fiscal 2025 pro forma revenue is from sole-source positions, and about 88% is from IP-enabled programs.

Epstein noted these capabilities strengthen Applied Aerospace & Defense’s competitive position and foster long-term customer relationships.

Applied Aerospace & Defense reported a $1.06 billion backlog as of March 2026, providing BofA with confidence in near-term revenue visibility.

This backlog exceeds 1.5x BofA’s 2026 revenue estimate and accounts for approximately 72% of the combined 2026 and 2027 revenue estimates.

Financial Projections Indicate Revenue and Margin Growth

Epstein expects Applied Aerospace & Defense to benefit from several growth drivers and increased operating leverage. BofA projects a 14% compound annual revenue growth rate from 2025 to 2030 and approximately 350 basis points of margin expansion by 2030.

BofA forecasts revenue growth from $604 million in 2025 to $690 million in 2026, $790 million in 2027, and $906 million in 2028. This represents year-over-year growth rates of 14.2% in 2026, 14.4% in 2027 and 14.8% in 2028.

BofA expects adjusted EPS to improve from a loss of 21 cents in 2025 to 22 cents in 2026. The firm projects adjusted EPS of 45 cents in 2027 and 54 cents in 2028.

Valuation And Key Watch Items

Epstein set the $24 price forecast using a 23 times 2027 estimated EV/EBITDA multiple.

BofA noted that this multiple is above the peer average and represents a 1.7x premium to the S&P 500, which the firm considers justified by AADX’s program exposure and growth prospects.

He also noted a potential equity overhang, as Greenbriar Equity Group holds approximately 80% of Applied Aerospace & Defense’s common stock post-IPO and may reduce its stake after the lock-up period ends.

Analysts Initiate Coverage On Applied Aerospace

• Morgan Stanley initiated coverage with an Equal-Weight rating and a $23 price target.
• RBC and Stifel started coverage with bullish ratings and $24 price targets.
• Baird was the most bullish, initiating coverage with an Outperform rating and a $30 price target.

Overall, the new coverage shows broadly positive sentiment toward Applied Aerospace, with three of the four analysts assigning bullish ratings. Price forecasts range from $23 to $30, with Baird setting the highest forecast.

Applied Aerospace & Defense Price Action

AADX Price Action: Applied Aerospace & Defense shares were up 0.66% at $20.69 at the time of publication on Monday, according to Benzinga Pro data.

Photo: rblfmr via Shutterstock