Boeing Struggles To Meet Production, FCF Growth Targets: Analysts Look Closer At Q3 Results

Boeing Co BA shares were climbing in early trading on Thursday after the company reported its third-quarter loss had narrowed.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

RBC Capital Markets On Boeing

Analyst Ken Herbert maintained a Sector Perform rating while reducing the price target from $210 to $200.

Boeing reported its third-quarter results in-line with expectations, “with a FCF usage of ($310M) and no change to its 2023 FCF guidance of $3B-$5B,” Herbert said in a note.

“The company did lower its 2023 737 delivery guidance to now 375-400, he added. “We believe the stock will be under pressure until visibility and confidence on the 2024 FCF outlook improves,” the analyst further wrote.

Morgan Stanley On Boeing

Analyst Kristine Liwag maintained an Equal-Weight rating while cutting the price target from $235 to $220.

Boeing reiterated its free cash flow guidance for 2025 and 2026 and “its aircraft production targets of 50/month and 10/month for 737 and 787 programs, respectively,” Liwag said. “Boeing would need to increase 737 MAX production by 61% and increase 787 production by 250% to meet these targets,” Liwag added.

“Our main takeaway from 3Q23 results is the continued recognition that the aircraft production ramp-up and expected free cash flow growth continues to shift to the right,” the analyst wrote.

Check out other analyst stock ratings.

Goldman Sachs On Boeing

Analyst Noah Poponak reiterated a Buy rating and price target of $258.

“Air travel and aircraft demand remain strong, providing Boeing with substantial high margin backlog,” Poponak wrote in a note.

“Supply chain challenges have continuously interrupted the planned output ramp-up to meet demand, but we think the industry can move past them heading into 2024 and beyond,” the analyst stated. “Defense margins have remained a drag, but Boeing defense has a path to normal industry profitability over time,” he added.

BA Price Action: Shares of Boeing had risen by 2.69% to $182.51 at the time of publication Thursday.

Photo: Courtesy Boeing