Boeing Development Ahead Of Schedule

Jefferies recently issued a company note on Boeing Co. BA after recent analysis showed several key initiatives that could drive growth in profitability. Analysts rate Boeing as a Buy with a $165 price target.

Analysts Howard Rubel and Sheila Kahyaoglu wrote, "We continue to believe that Boeing has the potential to improve its profitability by timely achievement of development milestones and completion of projects that improve supply chain and manufacturing performance...Our Adjusted EPS estimate for 2016 is unchanged at $8.60, but we are boosting our Adjusted EPS estimates for 2017 and 2018 to $9.65 and $10.60 from $9.45 and $10.25."

Analysts at Jefferies gave two key reasons why they raised Boeing's EPS target.

1. Margin Improvement

Jefferies noted that Boeing has the opportunity to realize margin growth due to an improved product mix, productivity gains and consistent R&D spending. As management attempts to control costs and improve business efficiency, Boeing has the potential to significantly improve their financial performance.

2. Decreasing Service Costs

Analysts highlighted reports that Boeing's new 787 fleet has a dispatch reliability of over 99 percent. This both decreases costs for the company and improves customer satisfaction, which could drive revenue growth in the future.