JP Morgan analyst says Boeing (BA) will emerge from crisis

There doesn’t seem to be any respite for Boeing (NYSE: BA) regarding the $4.3 billion contract negotiated under former President Donald Trump to develop and modify two 747-8 commercial jets to serve as Air Force One. The company suffered an additional $766 million loss in the third quarter on the much-delayed contract, wiping out nearly $2 billion of its profit so far. However, JP Morgan analyst Seth Seifman is optimistic that Boeing will successfully emerge from the crisis and recover.

The aircraft manufacturer said labor shortages and other inefficiencies continue to persist and are responsible for the additional losses incurred to modify the two US presidential jets. Additionally, vendor challenges and higher levels of engineering design changes due to technical requirements drive up costs for the business.

Boeing’s recent performance: a glimmer of hope in sight?

Boeing last week reported an adjusted third-quarter loss of $6.18 per share, up significantly from a loss of $0.60 in the year-ago quarter. Moreover, it largely missed analysts’ consensus earnings estimate of $0.13 per share.

Revenue of $16 billion was below the Street’s estimate of $17.9 billion, but compares favorably to $15.3 billion in the same quarter last year. Additionally, it reported positive free cash flow of $2.91 billion.

Boeing CEO Dave Calhoun said, “We generated strong cash during the quarter and are on track to achieve positive free cash flow for 2022. At the same time, revenue and earnings grew. significantly impacted by losses on our fixed price defense development programs. .”

The company has recently focused on its commercial sector, which has been sidelined in recent years due to the pandemic. As a result, Boeing reported a 40% increase in Commercial Aircraft Division revenue in the third quarter.

At a recent investor conference, Boeing disclosed plans to generate free cash flow between $1.5 billion and $2.0 billion in 2022 and between $3 billion and $5 billion in 2023. intention to increase deliveries of 737 MAX and 787 aircraft.

JP Morgan analyst Seth Seifman said: “We expect Boeing to emerge from the 737 MAX crisis and begin generating cash in 2022 as the stock is fueled by several catalysts, including the return of 787 recertification. and the 737 MAX in China and the increase in deliveries. .”

Seifman reiterated Boeing’s buy rating.

What is the forecast for Boeing Stock?

At TipRanks, BA stock has a Moderate Buy consensus rating based on 11 buys, two holds and one sell. Boeing’s average stock price target of $190.85 implies upside potential of 21.75%.


Boeing’s efforts to bolster the Commercial Aircraft unit and the resumption of its 787 Dreamliner aircraft deliveries after witnessing several setbacks bodes well for the company’s performance. However, issues with the Air Force One fixed-price contract, ongoing supply chain challenges and other macro issues could continue to impact BA’s stock in the near term.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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