By: Carter Copeland
News on Friday afternoon that the Pratt GTF engine had encountered a new problem (and a follow up on Saturday from Airbus confirming that GTFpowered aircraft deliveries would be halted) was particularly frustrating due to the fact that getting past GTF problems seemed to be a starting point for incremental bullishness among newer UTX owners. There are still things
that we don’t know, but we lean toward this being a relatively minor issue longer term. With that said, we expect investor nervousness to grow with each day there’s no definitive recovery plan, root cause identification, and GTF-powered A320 deliveries. Ultimately, we think the pullback related to this news will be buyable, but we don’t feel a sense of urgency given the program’s history of struggles.