Thursday, 18 April 2024

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Jefferies maintains Boeing Buy rating, steady stock price target By

American Airlines To Temporarily Suspend Route Due To Boeing 787 Delays: WSJ

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On Wednesday, Jefferies, a global investment banking firm, maintained its Buy rating on Boeing shares (NYSE:) with a steady price target of $300.00. The firm adjusted its first-quarter delivery estimate for Boeing’s Commercial Airplanes (BCA) division to 85 aircraft, down from the previous estimate of 99.

This revision takes into account the seasonal variability in widebody aircraft deliveries, with the 737 MAX deliveries expected to align with initial projections of 68 units.

The anticipated revenue for Boeing’s BCA segment in the first quarter is projected to be around $4.7 billion, which would represent a 30% decrease from the same period last year. This decline is attributed to an estimated 35% reduction in aircraft deliveries compared to the previous year.

Despite this anticipated drop in revenue, Jefferies suggests that the impact on Boeing’s financials may be mitigated. The firm points out that the expected decrease in BCA margin, guided to be around negative 20%, and the forecasted free cash flow (FCF) usage, projected to be between $4.0 billion and $4.5 billion, were likely already factored into the company’s first-quarter guidance.

The analysis by Jefferies indicates that there might be limited risk of negative surprises in Boeing’s upcoming financial results, as the potential decline in deliveries and revenue appears to have been anticipated in the company’s own projections for the quarter.

This assessment comes at a time when the aerospace industry is closely monitoring production and delivery schedules, particularly in light of the challenges faced by aircraft manufacturers in the past few years.

Boeing’s stock performance and investor sentiment are often influenced by such reports and projections, as market participants evaluate the company’s ability to meet its delivery targets and manage its financial health. The reiteration of the Buy rating by Jefferies, along with the maintained price target, suggests a positive outlook for the company’s stock amidst the current market conditions.

InvestingPro Insights

Boeing (NYSE:BA) continues to navigate a period of challenges, as reflected in the recent adjustments to first-quarter delivery estimates. In line with Jefferies’ analysis, InvestingPro data indicates a market capitalization of $114.59 billion for Boeing, with a significant revenue growth rate of 16.79% over the last twelve months as of Q1 2023.

This suggests that despite the current difficulties, Boeing is still managing to grow its…

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