Bernstein's Harned Reiterates Boeing 'Outperform,' Hikes Target To $196

In a report published Thursday, Bernstein analyst Douglas S. Harned maintained an Outperform rating on

, while raising the price target from $190 to $196. Boeing generated 2Q free cash flows of $2.6 billion and operating cash flows of $3.3 billion, ahead of the Bernstein estimates of $1.7 billion and $2.1 billion, respectively. The company's 2Q15 core EPS of $1.62 was ahead of the estimate, while its revenue for the quarter, at $24.5 billion, was marginally lower. The company reiterated its 2015 free cash flow guidance of at least $6.2 billion. "We expect free cash flow to continue rising in H2 as it has in prior years," analyst Douglas Harned said, while adding that 787 was also moving towards achieving positive cash flows. In the report Bernstein noted, "Boeing reduced its EPS guidance for the year by $0.50, with the $0.77 impact of the KC-46 tanker charge being partially offset by improved operating performance ($0.11) and a lower tax rate for the year ($0.16)." The revenue guidance for the year was, however, maintained at $94.5-$96.5 billion on 750-755 deliveries. Management reaffirmed that the 787 would be cash positive by the end of this year. The company has repurchased $4.5 billion worth of stock so far this year. Harned expects the company to buy back about $6.9 billion this year. Harned noted that Boeing's shares are likely to be primarily driven by the company's commercial airplanes division. Improved pricing and ongoing cost reduction efforts on the 787 were the key drivers of the company's future performance.