The Boeing Company (BA)

The Boeing Company (BA) reported a 4Q20 EPS loss of $15.25, which fell below forecasts (Tier4: -$1.30; Street: -$1.78) despite better-than-expected revenues of $15.3B (down 15% y/y). However, the company was forced to assume $8.3B of total charges, which included a $6.5M accounting block charge applied to the 777x program. Continue reading

We downgraded the shares of The Boeing Company (BA) to UNDERPERFORM this evening following a thorough review of important macro drivers and the secondary data collected from our aero supplier surveys. Ahead of the company’s 4Q earnings update, scheduled for late-January, we believe BA shares could dip below $200 should the investor focus shift to a muted earnings growth outlook and balance sheet stress. Coincidently, we are also less-bullish on our beloved Cleveland Browns heading into the Sunday playoff game, but we digress… Continue reading

Despite a relatively solid earnings update, which beat our forecast for the first time in four quarters, we are unable to construct a convincing bull-case argument. We ultimately came away with from yesterday’s update with limited earnings and FCF visibility, still digesting the conservatism embedded in management’s commentary. While there were no formal changes made to aircraft build rates, downward adjustments seem almost inevitable against the backdrop of waning demand. Continue reading

The trading catalysts used in the near-term sell rating we had on The Boeing Company (BA) played out as expected, with the red flags detected in surveys turning into the talking points behind a disappointing 2Q20 earnings report and corporate view that is slanting down again. Continue reading

We are downgrading the shares of The Boeing Company (BA) to a SELL recommendation with a revised twelve-month target price of $132 (30% below yesterday’s close), following a final verification of a destabilized aerospace channel environment and rapidly falling contact expectations (looking out two years). Continue reading

Communications with aerospace contacts confirmed the Airbus management team’s intention to hold A320 build rates steady at 40/month. The new production schedules shared with major suppliers this week indicates no material change in planning for the next twelve months. Continue reading

We are upgrading the shares of The Boeing Company (BA) to an OUTPERFORM recommendation (versus a sell), expecting the aerospace industry and individual company headlines to be less-negative going forward. The current share price of $120 seemingly discounts all of the main risk(s) associated with a difficult 1H20 customer demand environment and potential 2Q earnings shortfall. Our commercial aerospace channel checks have been pointing south for most of the year, including the subdued contact feedback […]

We are initiating formal coverage on the shares of The Boeing Company (BA) with a SELL recommendation and a twelve-month price target of $120. We expect the stock to trade lower once consensus estimates are reset and aligned with an increasingly negative commercial aircraft production outlook, a sharp pullback in aftermarket sales, and a 1Q18 earnings shortfall. We came away from a bottoms-up look at the company, which included proprietary aerospace supplier survey-work and follow-up analysis, with an incrementally bearish and view of the company and industry. Continue reading