Boeing Faces Delivery Downturn, But Analyst Sees Bright Spots In Orders

Zinger Key Points
  • Stifel analyst lowers Boeing's price target to $260 from $270, maintaining Buy rating.
  • Despite challenges, the analyst expects improvement throughout the year with Boeing producing at ~5/month and strong order activity.

Stifel analyst Bert W. Subin lowered the price target on The Boeing Company BA shares to $260 from $270 and maintained a Buy rating.

The price target reduction came after the company reported lower deliveries.

Yesterday, Boeing declared it delivered 83 commercial aircraft for the quarter, significantly lower than 130 in the year-ago period.

Subin says Boeing posted 29 deliveries split between MAXs (24) and 787s (5) in March, and both were touch light for the month, which was not surprising given everything that’s been going on to start 2024.

The deliveries to China and India were strong in the month at 12, indicating playing out of the inventory drawdown, writes the analyst.

Nevertheless, the analyst expects to see improvement throughout the year as the company is producing at ~5/month, with likely 40+ still in inventory. 

Also, the analyst says that the orders were a bright spot with 98 MAX orders, 29 for 777s and 4 for 787s.

Overall, Subin says that Boeing is on track to see build rate improvement, which, when paired with BGS strength and BDS improvement, should aid in generating material FCF growth in 2025+.

The analyst estimates EPS of $(1.13) in FY24 and $5.85 in FY25.

According to Benzinga Pro, BA stock has lost over 17% in the past year. Investors can gain exposure to the stock via IShares U.S. Aerospace & Defense ETF ITA and Invesco Aerospace & Defense ETF PPA.

Also ReadBoeing 787 Dreamliner Safety Claims To Get Senate Grilling After Engineer’s Warning

Price Action: BA shares are trading lower by 2.6% to $173.48 on the last check Wednesday. 

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