Boeing's (BA) New CFO Doesn't Have a Magic Wand, Thoughts from Management Call - Vertical Research Partners
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Vertical Research Partners analyst Robert Stallard reiterated a Hold rating and $250.00 price target on Boeing (NYSE: BA) after meeting with with Boeing’s new CFO, Brian West who expressed conservatism regarding the balance sheet which implies debt reduction. Unfortunately this takes time and the two biggest issues to improve cash flow, the recerts of the 787 domestically and the 737 in China, are out of the control of management.
The analyst stated "Brian’s message on the balance sheet is very similar to what we have heard from CEO Dave Calhoun, in that Boeing needs to get its debt balance down to a more reasonable level. And to do that needs cashflow, which in turn requires these operational issues to be sorted out. Unless Boeing does something radical, like an equity raise, we see this commentary as supporting our view that it will be some time before Boeing is in a position to return cash to shareholders again, or to launch any risky and expensive new aircraft programs." He went on to state ""it sounds like there are a number of things that Boeing needs to resolve before management will feel comfortable again providing financial guidance and other targets."
Shares of Boeing closed at $214.22 yesterday.
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