Core Insights - Amazon has disclosed a new investment in Beta Technologies, a company specializing in electric aircraft and propulsion systems, which has positively impacted Beta's stock price following the announcement [1] Company Summary - Amazon's investment in Beta Technologies was revealed through a regulatory filing, indicating a strategic interest in the electric aviation sector [1] - The announcement led to an increase in Beta Technologies' stock price on Wednesday, reflecting market optimism regarding the partnership [1] Industry Summary - The electric aircraft and propulsion industry is gaining traction, with significant investments from major companies like Amazon, highlighting the growing interest in sustainable aviation solutions [1]

TD Cowen 47th Annual Aerospace & Defense Conference February 11, 2026 I N T R O D U C T I O N Steve Gitlin Vice President, Investor relations 2 This presentation may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be ide ...

Group 1: Company Overview - Karman Holdings Inc. (NYSE:KRMN) designs, tests, manufactures, and sells mission-critical systems in the US, including payload protection and deployment systems, aerodynamic interstage systems, and propulsion systems [4] Group 2: Analyst Ratings and Price Targets - KeyBanc analyst Michael Leshock raised the price target for Karman to $122 from $80, citing a surge in momentum within the space and defense tech industries and projecting a favorable macroeconomic environment through 2026 [1] - Piper Sandler initiated coverage of Karman with a Neutral rating and a $98 price target, noting the company's strong fundamentals but suggesting that the stock's recent 37% rally over the first 13 trading days of 2026 has exhausted its immediate tactical appeal [2] - Citi increased its price target for Karman to $123 from $84, maintaining a Buy rating and indicating that the sector's current momentum is expected to persist through at least the first half of 2026 [3] Group 3: Industry Outlook - The broader sector update indicates that substantial growth opportunities are anticipated in the space and defense tech industries, leading to a positive re-rating of equities across the industry [1]

Market Overview - The market in 2025 was characterized by extreme volatility, with small caps experiencing a significant rally followed by a sharp retreat due to various uncertainties, including government policy and AI-related concerns [4][5] - Small caps outperformed large caps in earnings growth for the first time in over a decade during the third quarter, indicating an improving earnings backdrop for this asset class [5][6] - Despite challenges, the U.S. economy showed solid growth, allowing the Federal Reserve to continue its rate-cutting cycle [4] Performance Overview - The ClearBridge Small Cap Growth Strategy underperformed the Russell 2000 Growth Index in the fourth quarter, primarily due to disappointing earnings in the IT sector and a strong rally in biotechnology stocks [6][7] - The biotechnology sector saw a significant rebound, with the Russell 2000 Growth Biotech Index returning 28.1%, highlighting the challenges faced by other sectors [6] - The health care sector contributed positively to performance, with notable individual performers like Penumbra and Insmed [8][19] Portfolio Positioning - In 2025, the company established 29 new investments and exited 19 positions, indicating an active year for idea generation [10][11] - New investments included Protagonist Therapeutics, Simpson Manufacturing Company, BETA Technologies, and Dyne Therapeutics, each with strong growth potential in their respective fields [11][22] - The company maintained a disciplined approach to selling positions where fundamentals changed or catalysts were lacking [10] Outlook - The outlook for small cap growth stocks in 2026 is optimistic, with expectations for a broadening of growth leadership across various industries [13][14] - The productivity benefits of AI are anticipated to become more visible, potentially benefiting companies leveraging AI for efficiency and new product offerings [14] - Capital markets are showing signs of improvement, with increased IPO activity and M&A volumes, creating a favorable environment for small cap investments [15][16]

Core Viewpoint - Wartsila has received mixed ratings from analysts, with a consensus rating of "Reduce" based on recent reports, indicating cautious sentiment towards the stock [1]. Financial Performance - Wartsila reported earnings of $0.07 per share (EPS) for the quarter ending October 28, with revenue of $1.91 billion, falling short of analyst estimates of $1.99 billion [4]. - The company has a net margin of 8.89% and a return on equity of 23.64% [4]. - Analysts forecast an EPS of 0.18 for the current year [4]. Stock Performance - Wartsila's stock increased by 1.5%, reaching a 52-week high of $7.42 during trading, with a closing price of $7.31 prior to this peak [2][8]. - The stock's 50-day moving average price is $6.73, while the 200-day moving average price is $5.96 [2][3]. Company Overview - Wartsila is a Finnish technology company specializing in sustainable solutions for the marine and energy sectors, founded in 1834 and headquartered in Helsinki, Finland [5]. - The company designs, manufactures, and services equipment including marine engines, propulsion systems, and power plants [5]. - Wartsila operates in over 80 countries, serving shipowners, shipyards, power producers, and utilities globally [6]. Financial Ratios - The company has a current ratio of 1.28, a quick ratio of 0.90, and a debt-to-equity ratio of 0.12 [2][3]. - The price-to-earnings (P/E) ratio stands at 33.73, with a beta of 1.22 [2].

Market Performance - The U.S. stock market indices showed mixed results, with the S&P 500 increasing by approximately 0.1%, the Nasdaq Composite decreasing by 0.3%, and the Dow Jones Industrial Average rising by 0.7% [1] Investment Strategy - In uncertain market conditions, it is suggested that investors consider low-leverage stocks as safer investment options. Recommended companies include CSW Industrials, Jones Lang LaSalle, Hecla Mining, Safran SA, and Siemens Energy, all of which exhibit low leverage [2][10] Understanding Leverage - Leverage in finance refers to borrowing capital for operations and expansion, typically through debt financing. While debt can facilitate growth, excessive reliance on it can lead to significant risks [4][5] Debt-to-Equity Ratio - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with a lower ratio indicating better solvency. Investors are encouraged to focus on stocks with low debt-to-equity ratios to mitigate risks during economic downturns [7][9] Company Highlights - **CSW Industrials**: Recently completed a $650 million acquisition to enhance its HVAC and refrigeration market presence. The Zacks Consensus Estimate predicts a 23.5% sales increase for fiscal 2026 [15][16] - **Jones Lang LaSalle**: Reported a 29% year-over-year increase in adjusted earnings per share and a 10% revenue growth in local currency for Q3 2025. The Zacks Consensus Estimate suggests a 10.3% sales improvement for 2025 [17][18] - **Hecla Mining**: Achieved a 65.4% revenue increase and a 204.4% gross profit surge in Q3 2025. The Zacks Consensus Estimate indicates a 33.3% sales growth for 2025 [19][20] - **Safran**: Announced a partnership renewal with Polytechnique Montréal to support sustainable aviation technologies, with a projected 39.9% sales improvement for 2025 [21][22] - **Siemens Energy**: Focuses on renewable energy, particularly wind power, and is set to supply gas turbines to Xcel Energy, with a 21.2% sales growth forecast for fiscal 2026 [23][24]

Core Insights - Dana Incorporated (NYSE:DAN) is recognized as one of the best small-cap EV stocks to buy according to analysts [1] - Wells Fargo lowered its price target for Dana from $22 to $21 while maintaining an Equal Weight rating [1] - UBS analyst Joseph Spak reiterated a Buy rating with a price target of $25 [3] Financial Performance - Dana reported $2.35 billion in revenue for the fiscal second quarter of 2025, a decrease of 14% year-over-year, but exceeded Wall Street estimates by $49.5 million [3] - The company's earnings per share (EPS) of $0.13 fell short of estimates by $0.03 [3] - Management raised its full-year guidance by $250 million, adjusted EBITDA by $35 million, and free cash flow by $50 million ahead of the fiscal third-quarter results expected on November 5, 2025 [2] Business Overview - Dana Incorporated specializes in energy management solutions and designs and manufactures propulsion systems for vehicles and machines across global mobility markets [4]

Group 1 - GE Aerospace has entered into a partnership and equity investment agreement with BETA Technologies to advance hybrid electric aviation, pending regulatory approval [1][3] - BETA Technologies specializes in producing electric aircraft and propulsion systems, focusing on safe and cost-efficient operations across various markets [2] - The collaboration aims to develop a hybrid electric turbogenerator for Advanced Air Mobility (AAM) applications, leveraging GE's engine expertise and BETA's advanced technology [4][8] Group 2 - GE Aerospace plans to invest $300 million in BETA, which includes the right to appoint a director to BETA's board [5][8] - GE Aerospace is currently ranked 1 (Strong Buy) by Zacks, benefiting from a growing installed base and increased utilization of engine platforms [6] - Over the past six months, GE's shares have increased by 41.6%, outperforming the industry growth of 23.3% [7]

Core Insights - Linamar Corporation reported a significant increase in free cash flow, generating $177.6 million in Q2 2025, up $110.5 million from the previous year, attributed to careful cash management [5] - The company maintained strong liquidity at $1.9 billion, reflecting a 46.7% increase from Q2 2024 [5] - Despite lower sales in the industrial segment, Linamar achieved market share growth in key products and regions within its access and agriculture businesses [1] Financial Performance - Total sales for Q2 2025 were $2,642.7 million, a decrease from $2,848.7 million in Q2 2024 [4] - Operating earnings for the industrial segment were $53.8 million, down from $154.7 million in the same quarter last year, while the mobility segment saw an increase to $152.4 million from $116.8 million [4] - Net earnings for Q2 2025 were $126.9 million, compared to $174.1 million in Q2 2024, with diluted net earnings per share decreasing to $2.12 from $2.82 [4][6] Segment Insights - The mobility segment continued to show normalized earnings growth, with normalized operating earnings increasing by 19.6% to $150.9 million [6] - Market share growth in the mobility segment was driven by new product launches, particularly in North America and Asia Pacific [2] - The industrial segment's normalized operating earnings were $103.3 million, down from $164.3 million in Q2 2024, indicating challenges despite market share gains [4][6] Shareholder Returns - Linamar repurchased 1.1 million shares year-to-date as part of its normal course issuer bid, totaling 1.8 million shares since the program's inception in November 2024 [5] - The company declared a quarterly dividend of CDN$0.29 per share, payable on or after September 9, 2025 [8] Strategic Positioning - Linamar's products remain compliant with USMCA, allowing for tariff-free access to the US market, which has been a strategic advantage amid recent tariff challenges [3] - The company is actively pursuing opportunities arising from customer-driven onshoring and potential acquisitions of distressed suppliers, supported by a strong cash position [5][3]

Core Insights - BWX Technologies reported strong Q2 2025 results, with revenue of $764.0 million, exceeding analyst estimates of $711.1 million, and non-GAAP EPS of $1.02, surpassing the consensus of $0.79 [1][2] - The company's backlog reached a record $6.0 billion, prompting an increase in revenue and earnings forecasts for 2025 [1][8] - Despite strong overall growth, challenges in commercial profit margins were noted, particularly due to raw material cost pressures [1][5] Financial Performance - Non-GAAP EPS for Q2 2025 was $1.02, a 24% increase from $0.82 in Q2 2024 [2] - GAAP revenue was $764.0 million, reflecting a 12% year-over-year growth from $681.5 million [2] - Adjusted EBITDA rose 16% to $145.9 million compared to $126.2 million in Q2 2024 [2][7] - Free cash flow significantly improved to $126.3 million from $35.5 million in Q2 2024, marking a 256.1% increase [2][7] Business Segments - BWX Technologies operates in two main segments: Government Operations and Commercial Operations [3] - Government Operations generated $589.0 million in GAAP revenue, up 9% year-over-year, with a record backlog of $4.44 billion [5] - Commercial Operations reported revenue of $176.1 million, a 24% increase from Q2 2024, but faced a 59% drop in operating income due to unfavorable project mix and increased costs [5] Strategic Developments - The acquisition of Kinectrics in May 2025 aims to enhance BWXT's capabilities in nuclear lifecycle services and radiopharmaceuticals [6] - The consolidated order backlog reached a record $6.0 billion, supported by recent acquisitions [6] - The company is expanding manufacturing capabilities, including scaling up operations at its Cambridge facility in Canada [6] Financial Outlook - Management raised its 2025 financial guidance, projecting revenue near $3.1 billion and non-GAAP EPS of $3.65–$3.75 [8] - Adjusted EBITDA is now expected to be between $565 million and $575 million, with free cash flow guidance increased to $275–$285 million [8] - Key factors to monitor include margin recovery in Commercial Operations and the integration of newly acquired businesses [8]