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Spirit Aerosystems (SPR) Risks Include Boeing (BA) 787 Grounding

February 13, 2013 12:46 PM EST Send to a Friend
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Price: $33.45 -1.27%

Rating Summary:
    11 Buy, 12 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 38 | New: 6
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On Monday Spirit Aerosystems (NYSE: SPR) reported Q4 results, topping estimates on the top and bottom line.

Commenting on developments, Imperial Capital analyst Ken Herbert said, "We believe SPR had a relatively strong end to FY12, especially with free cash flow (FCF) for the year of $295mn. However, we were surprised to see additional charges associated with key development programs, such as the G280."

Herbert thinks the company faces risk as it attempts to increase rates and secure long-term supplier contracts.

"The company highlighted the most execution risk with the business jet programs (G280 and G650) but in absolute terms, the 787 and the A350 represent the most dollar risk. We believe that the recent 787 grounding has significantly increased the 787 risk, and we would not be surprised if Boeing (NYSE: BA) put a pause, or slowdown, on 787 supplier shipments as it works through the grounding," added the analyst.

Imperial Capital has an In-Line rating on Spirit AeroSystems with a price target of $20.00

For an analyst ratings summary and ratings history on Spirit AeroSystems (NYSE: SPR) click here. For more ratings news on Spirit AeroSystems click here.

Shares of Spirit AeroSystems closed at $16.95 yesterday.




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