Aerospace and Defense Industry Update

Q2 2026

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GCG’s Q2 2026 Aerospace and Defense Industry Update provides an overview of the latest trends in the sector, including recent equity market performance, valuation multiples, and transaction activity.

Select highlights include the following:

  • The A&D sector maintained strong momentum in Q2 2026, highlighted by NASA’s Artemis II mission – the first crewed lunar flyby since 1972 – alongside the Administration’s invocation of Defense Production Act authority to address systemic constraints in the munitions industrial base, opening the door to more coordinated production agreements among primes and suppliers.
  • M&A activity accelerated in Q2 2026 to 135 closed transactions, the highest quarterly deal count of the last three years, as strategic buyers accounted for 68.9% of deal volume, up from 64.6% in Q1 2026 – with Aerospace representing the largest share of activity at 56.3%.
  • Public market performance remained strong across aerospace-facing sectors in Q2 2026, with Aerospace Suppliers and Aircraft/Engine OEMs leading both the three-year and LTM periods, while Defense Tier 1 and Defense Suppliers cooled and trailed the broader indices on an LTM basis despite still leading over three years.
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