Boeing's August Performance Triggers Analyst To Lower Estimates, But Long-Term Confidence Persists

Susquehanna analyst Charles Minervino reiterated Boeing Co BA with a Positive and a $270 price target.

Boeing posted sequentially lower deliveries and gross orders for August, with deliveries of 35 down from July's 43 and gross orders of 45 down from July's 52. 

Boeing's 737 deliveries (22) came in softer due to the aft pressure bulkhead issue, whereas solid 787 deliveries (5) were on pace with the analyst's implied monthly estimate. 

Orders for 38 MAX planes during the month provide another proof point of solid demand. 

The analyst lowered his estimates to reflect both the August data and the recent commentary from management regarding the 737 rework. 

Minervino's new 3Q and FY23 EPS estimates are ($3.00) and ($3.72) vs. his prior estimates of ($0.05) and ($1.82). His FY24 and FY25 estimates decrease modestly. The FY24 and FY25 EPS estimates are now $5.65 and $10.04 vs. his prior estimates of $6.25 and $10.72.

While this 737 issue does create near-term headwinds, the analyst remains confident in Boeing's ability to execute effectively. 

The current demand environment is robust, and Boeing remains well-positioned.

Price Action: BA shares traded higher by 0.03% at $210.66 on the last check Wednesday.