Citi Sees Potential for a Gulfstream G650 Follow-on

Analyst Citi is anticipating that Gulfstream Aerospace will reveal a new product this year, and believes it likely will be an enhancement to its flagship G650.

In a recent report from Citi Aerospace & Defense North America, the firm expressed its belief that Bombardier’s Global 7500 has no real competition and has created a new market that is “clearly the go-to” for the biggest. Citi questioned whether this could push up 7500 pricing, which is also helped by a long backlog. At the same time, G650 pricing may soften, but the analyst doubted that would be significant. “It’s neither a disaster nor a surprise for Gulfstream. They’ve been around for decades and are good at managing supply.”

On the product development front, Citi added, “leap-frogging is common in this industry, so we expect a new product from GD this year.” Pointing to a possible G650 enhancement, Citi suggested such an initiative could have a larger fuselage, a new engine, updated cockpit, and maybe a new wing. Such changes would avoid cannibalizing the current G650 but also ensure a quick path to service entry.

“There’s strong brand loyalty with Gulfstream, such that the 300-to-400 G650s in service provides fertile ground for new buyers of whatever comes next,” Citi said. “The 7500 backlog and the large G650/Globals installed base suggest there are going to be buyers for more, bigger aircraft down the line.”