Jefferies Comments on Boeing (BA) Following Q3 Delivery Data; Nudges Expectations Up on Stronger Results
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Price: $164.33 -2.87%
Rating Summary:
23 Buy, 14 Hold, 4 Sell
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
23 Buy, 14 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Jefferies commented on Boeing (NYSE: BA) following third-quarter delivery numbers, issued Thursday. The firm maintained its Buy rating and $90 price target.
Jefferies said it is boosting estimates following the numbers, raising its third-quarter EPS expectations from $1.10 to $1.17 and fiscal 2011 EPS from $4.45 to $4.50. Jefferies is maintaining its 2012 EPS expectation of $5.00.
Deliveries for Boeing were 127 commercial jetliners in the quarter, compared to Jefferies estimate of 124. Commenting, "Pricing for the mature product lines remains good, and the 777 continues to win new business at a very high rate. We assume zero gross margin for the 787. With certification of the plane, R&D should fall and certain ongoing engineering costs can now be booked as costs of production."
Jefferies also noted a 1 percent improvement in Commercial pricing versus costs, leading to $350 million in pre-tax earnings, or 30 cents per share. The base leverage is 6.5 to 1.
Defense deliveries came in as expected.
In closing, Jefferies said, "Pricing for the mature product lines remains good, and the 777 continues to win new business at a very high rate. We assume zero gross margin for the 787. With certification of the plane, R&D should fall and certain ongoing engineering costs can now be booked as costs of production."
Click here for more analyst color on Boeing, or here for a ratings history.
Boeing is trading flat early Friday morning.
Jefferies said it is boosting estimates following the numbers, raising its third-quarter EPS expectations from $1.10 to $1.17 and fiscal 2011 EPS from $4.45 to $4.50. Jefferies is maintaining its 2012 EPS expectation of $5.00.
Deliveries for Boeing were 127 commercial jetliners in the quarter, compared to Jefferies estimate of 124. Commenting, "Pricing for the mature product lines remains good, and the 777 continues to win new business at a very high rate. We assume zero gross margin for the 787. With certification of the plane, R&D should fall and certain ongoing engineering costs can now be booked as costs of production."
Jefferies also noted a 1 percent improvement in Commercial pricing versus costs, leading to $350 million in pre-tax earnings, or 30 cents per share. The base leverage is 6.5 to 1.
Defense deliveries came in as expected.
In closing, Jefferies said, "Pricing for the mature product lines remains good, and the 777 continues to win new business at a very high rate. We assume zero gross margin for the 787. With certification of the plane, R&D should fall and certain ongoing engineering costs can now be booked as costs of production."
Click here for more analyst color on Boeing, or here for a ratings history.
Boeing is trading flat early Friday morning.
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