2025-06-11-Jefferies-2026财年预算更新_F-35成为新闻焦点_但可能是两项法案的故事_8页_106kb

FY26 Budget Update Summary: F-35 in the News, But Likely a Tale of Two Bills

Core Content

The FY26 budget update highlights a dual-track approach to defense funding, which has caused confusion and ambiguity in the budgeting process. The administration has submitted two distinct scenarios for the FY26 defense budget, creating a situation where Congress must navigate both the base funding request and a reconciliation bill that would significantly increase total investment spending. This dual strategy is intended to push for higher defense spending while keeping the base budget relatively flat, with the goal of securing additional funds through the reconciliation process.

Main Points

1. Dual Track Budgeting

• The base investment spending request is $295.2BB, representing a -4% y-o-y decrease.
• The reconciliation scenario would increase total investment spending to $384.3BB, a +24% y-o-y increase.
• The reconciliation bill is expected to add $150BB over five years to defense spending.

2. F-35 Funding Discrepancy

• The Administration's base request includes 24 F-35A aircraft, a sharp decrease from the prior plan of 48.
• However, the House Appropriations Bill funds 42 F-35A, 14 F-35C, and 13 F-35B, totaling 69 F-35s for $8.5BB.
• This indicates that the House is likely to push back against the administration’s proposed cuts to the F-35 program.

3. Investment Spending Trends

• The base scenario for FY26 shows a 4% increase in procurement compared to the FY25 Continuing Resolution (CR).
• R&D is expected to see a 5% increase in the base scenario.
• The reconciliation bill would add $37BB to RDT&E and $52BB to Procurement, resulting in a +19% increase in total investment spending.

4. Program Funding Highlights

• The House Appropriations Bill fully funds key programs such as the F-35, B-21, KC-46s, CH-53K, NSSL Phase 3 Contract, E-2D, and UH/HH-60M.
• Some programs like MQ-1C Gray Eagle and F-15EX show significant cuts in the administration’s request, which the House may counter.

Key Information

Budget Scenarios

F-35 Funding

Key Program Funding Changes

• F-35: House funds 69 aircraft for $8.5BB.
• B-21: House increases funding to $3,800MM.
• KC-46s: House funds $2,700MM for 15 aircraft.
• CH-53K: House funds $2,020MM for 19 aircraft.
• MQ-1C Gray Eagle: House funds $240MM for 8 aircraft.
• F-15EX: House funds $345MM for 3 aircraft.
• MQ-25: House funds $507MM for 3 aircraft.
• E-2D: House funds $1,200MM for 4 aircraft.

Spending Growth by Service

Analysts and Contact Information

• Sheila Kahyaoglu | Equity Analyst
  +1 (212) 336-7216 | sheila.kahyaoglu@jefferies.com

• Greg Konrad, CFA | Equity Analyst
  +1 (212) 284-2391 | gkonrad@jefferies.com

• Kyle Wenclawiak | Equity Associate
  +1 (212) 323-7671 | kwenclawiak@jefferies.com

• Conor Walters | Equity Associate
  +1 (212) 323-3395 | cwalters@jefferies.com

• Ellen Page | Equity Associate
  +1 (212) 323-3381 | epage@jefferies.com

Investment Recommendations

• Buy: Securities expected to provide a total return of 15% or more in 12 months.
• Hold: Securities expected to provide a total return of +15% or -10% in 12 months.
• Underperform: Securities expected to provide a total return of -10% or less in 12 months.
• NR: Rating and price target temporarily suspended.
• CS: Coverage suspended.
• NC: Not covered.
• Restricted: Issuers with restrictions on communications.
• Monitor: Securities being monitored without financial projections.

Valuation Methodology

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• Market capitalization
• Maturity, growth/value
• Volatility and expected total return
• DCF, EBITDA, EPS, FCF, EV/EBITDA, P/E, etc.

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