​​​GE Aerospace: engines firing on all cylinders

​Shares in GE Aerospace have surged nearly 60% year-to-date, making this one of the standout performers in the industrial sector. The company's second quarter (Q2) results provided fresh fuel for this rally, with adjusted revenue climbing 23% year-over-year (YoY) to $10.2 billion.

​Management's decision to raise both revenue growth and earnings per share (EPS) guidance for 2025 signals genuine confidence in the business trajectory. More significantly, the company expects double-digit annual expansion through 2028, providing rare earnings visibility in today's uncertain environment.

​The aerospace engine market is experiencing a structural recovery as airlines refresh their fleets and air travel demand normalises. This creates a multi-year tailwind for GE's commercial engine business, which benefits from lucrative long-term service contracts that provide revenue visibility.

​Barclays: UK banking recovery gaining traction 

​The UK banking sector continues to offer value opportunities, and Barclays stands out with first-half 2025 pre-tax profits jumping 23-24% to £5.2 billion. This performance was supported by resilient investment banking revenues, demonstrating the benefits of the bank's diversified business model.

​The announcement of a £1 billion share buyback scheme alongside a confirmed interim dividend of 3p per share provides multiple routes for shareholder returns. This combination demonstrates management confidence while the fundamental improvement story continues to unfold.

​Returns on tangible equity improving to 12.3% from 9.9% highlight the franchise's ongoing recovery. The diversification benefits from investment banking have proven valuable during periods of retail banking pressure, providing earnings stability that pure retail banks lack.

​Buy shares in Barclays remain attractively valued despite the improving fundamentals, trading below book value. This valuation discount creates potential for significant re-rating if the bank continues delivering on targets and UK economic conditions stabilise. 

​BAE Systems: defence spending drives growth

​Defence contractor BAE Systems delivered an 8.8% revenue increase and 2.2% net income rise for H1 2025, with management raising full-year EBIT and sales guidance. The company benefits from a solid order book boosted by higher defence spending and new contract wins globally.

​Forecast sales growth of around 8% annually over three years exceeds industry norms, supported by expanding margins as the company leverages operational improvements. This growth profile stands out when many companies struggle to maintain momentum in challenging economic conditions.

​The defence sector continues benefiting from geopolitical tensions and increased military spending across Western nations. This supportive backdrop provides BAE with revenue visibility while governments prioritise defence capabilities and military modernisation programmes.

​Despite recent stock volatility, BAE's improving fundamentals and sector tailwinds provide upside potential. The company's global positioning offers both growth characteristics and defensive qualities, appealing to investors seeking exposure to increased defence expenditure trends.