⌛ Did you miss ProPicks’ 13% gains in May? Subscribe now & catch June’s top AI-picked stocks early.Unlock Stocks

Boeing shares hold buy rating, price target cut on surpassing expectations

EditorNatashya Angelica
Published 04/24/2024, 05:54 PM
© Reuters.

On Wednesday, Stifel, a financial services firm, adjusted its outlook on Boeing shares (NYSE:BA), lowering the stock price target to $240 from $260, while maintaining a Buy rating. The change follows the aerospace giant's first-quarter financial results, which surpassed expectations in terms of adjusted earnings per share (EPS) and free cash flow (FCF). Boeing reported an adjusted EPS of ($1.13) and a FCF of ($3.9 billion), with sales figures also exceeding forecasts.

Despite better-than-expected first-quarter results, Boeing faced significant disruptions in its Commercial Airplanes division. The company's near-term focus is expected to be on several key areas, including the 737 production, which hinges on the Federal Aviation Administration's action plan and Boeing's compliance with it.

Other focal points include the 787 production, the drawdown of aircraft inventory, the ongoing search for a new CEO, and the certification processes for the 737-7/10 and 777X models. Moreover, the potential acquisition of aerospace manufacturer Spirit AeroSystems (NYSE:SPR) is also on Boeing's agenda.

Stifel suggests that Boeing's estimates are nearing a low point, indicating a potential for the company to outperform in terms of FCF in the future. Stil, the firm anticipates that a sustained rally in Boeing's share price is unlikely until the announcement of a new CEO. The current uncertainties surrounding the company, including production issues and executive leadership, have led to a challenging start to 2024 for Boeing's stock.

Despite these challenges, the demand for Boeing's products remains robust. Stifel expresses optimism that as the uncertainties begin to clear, there is a possibility for a meaningful recovery in Boeing's share performance. The firm highlights that today's financial results were better than expected, which could contribute to a rebound once the aforementioned issues are addressed.

InvestingPro Insights

Boeing's recent financial performance may have exceeded expectations, but real-time data from InvestingPro paints a mixed picture for investors. With a market cap of $100.73 billion, the aerospace titan is trading near its 52-week low, reflecting the stock's recent volatility and the challenges it has faced.

A noteworthy point is that the Relative Strength Index (RSI) suggests the stock is in oversold territory, which might appeal to contrarian investors or those looking for a potential turnaround situation.

InvestingPro Tips highlight that Boeing is not expected to be profitable this year and has been trading at a high EBIT valuation multiple, which could be of concern to value-focused investors. Additionally, with 17 analysts revising their earnings downwards for the upcoming period, there's a sentiment of caution regarding Boeing's near-term financial outlook.

On the flip side, Boeing remains a prominent player in the Aerospace & Defense industry, and its strong revenue growth of 16.79% over the last twelve months as of Q1 2023 could signal underlying business strength amidst the turbulence.

For those considering an investment in Boeing, or current shareholders looking to make informed decisions, there are additional InvestingPro Tips available at: https://www.investing.com/pro/BA. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of expert analysis and metrics that could help navigate Boeing's complex investment landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.