By Sam Boughedda
Cowen analysts told investors in a note Friday that Boeing's (NYSE:BA) upcoming investor day is likely a key milestone.
The analysts, who have an Outperform rating and $230 per share price target on the stock, said that while Boeing's third quarter may lag consensus, investors will focus on the company's Investor Day and its free cash flow potential when things have "normalized."
"BA's Investor Day will review each of BA's three segments and its longer-term potential. This should include comments on what 'normalized' results could look like after BA gets beyond 737/787 inventory burnoff, 737/787 compensation costs, abnormal 787/777x production costs, with a return to normal levels of PDPs and payables," wrote the analysts, who also noted the stock remains the firm's top pick.
On deliveries, the analysts said Cirium data suggests Boeing delivered 39 737s in September, its second-best month of the year, topping the A320's 36 deliveries and reversing weak June and August 737 shipments. However, 737 output was lackluster, they added.
"Based on the light est. September deliveries, we look for Q3 revenue (report on 10/26) of $16.7B vs. Street's $18.2B and a 5¢/share loss vs. Street's initial 17¢ gain. Because 737/787 production looks like it was even lighter than deliveries, paring inventory, we still think cash flow can move into the black, but near $1.1B vs. Street's $1.6B. n the Q3 call, BA is apt to address supply chain/labor issues, Q4 trends, and 2023 'color,' including pension swings, which are adjusted out in the calculation of 'core' EPS," the analysts added.
Boeing shares are down over 2% Friday.