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Boeing's CEO Strikes Optimistic Tone At Analyst Conference

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Boeing's CEO Strikes Optimistic Tone At Analyst Conference
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Boeing Co (NYSE: BA) CEO Dennis Muilenburg told surprised analysts the company was increasing production of its flagship 787 Dreamliner from 12 a month in 2019 to 14, prompting Jefferies analyst Howard A. Rubel to rate the airline a Buy with a price target of $275.

Boeing was trading at $245.24 at last check, up 1.37 percent.

Production Increase Bodes Well

Muilenburg shared the news with analysts on Wednesday, which Rubel called “a bit of a positive surprise to investors, as this type of decision usually means the company is confident that the rate can last a couple of years.”

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“Given the lead-times, we figure this announcement could raise 2019 deliveries by about 8 to 10 aircraft vs. prior estimates and drive deliveries of the 787 to about 165 aircraft for 2020,” he said. “We currently project deliveries of 142 units in 2019 and 2020.”

Assuming a cost of $145 million per wide-body and cash margins of about 24 percent, then revenue and profit from the increase could be in the neighborhood of $3.3 billion and $800 million, respectively, in 2020, he said.

Related Link: What’s Next For Boeing, Dow’s Biggest Winner Of 2017

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Image Credit: By Boeing_787-8_maiden_flight_overhead_view.jpg: Dave Sizer from Seattle, WA, USA derivative work: Altair78 (talk) AdamsBridge.jpg: The original uploader was Bodhitha at English Wikipedia derivative work: Altair78 [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Latest Ratings for BA

DateFirmActionFromTo
Sep 2017JefferiesMaintainsBuy
Aug 2017Morgan StanleyMaintainsEqual-Weight
Jul 2017BuckinghamUpgradesUnderperformNeutral

View More Analyst Ratings for BA
View the Latest Analyst Ratings

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