Ducommun (DCO) Stock Forecast & Price Target

Ducommun is well-positioned to benefit from its exposure to high-growth sectors such as the aerospace and defense industries. The company's strong 1Q26 results and focus on margin expansion, combined with its solid 2026-2028 outlook for missiles/munitions and defense electronics, support our view that it will achieve its goal of 20%+ adj. EBITDA margins at its September 2026 investor day and its ~18% target in 2027. With a diverse portfolio, a growing M&A pipeline, and a focus on sustainability, we believe Ducommun's stock has a positive long-term outlook with potential for further upside in its margins and end-market growth.

Ducommun is currently facing stagnant growth in its commercial aerospace segment, and even with potential upside in 2027 from 737 MAX build rates, it is not likely to be a significant catalyst. The company's M&A activity has slowed, and competition for high quality assets remains elevated, limiting potential for adding to its engineered products portfolio. While margins have improved under current management, expectations for further margin growth are already highly elevated. Furthermore, while investors may associate Ducommun as a commercial aerospace stock, much of its recent strength has come from its defense business.