There is lots of talk focusing on turnarounds this year, especially in industries hit hardest by the pandemic. The aviation sector, of course, is one of those to have suffered the most, which only exacerbated other problems at Boeing (BA). Going by the aerospace giant’s latest quarterly results, the comeback is still very much in the early stages.
On the bright side, while revenue declined by 10% year-over-year to $15.22 billion, the top-line figure beat Street estimates by $140 million. However, there was a miss on the bottom-line, as Non-GAAP EPS of -$1.53 came in $0.46 below the consensus estimate.
Cowen analyst Cai von Rumohr says the results reflect “another tough quarter,” although the “very lackluster” results are not unexpected.
“Q1’s EPS miss reflected light results at BCA and BDS with slightly better than feared cash outflow, somewhat disappointing but no huge surprise,” the analyst noted.
Elsewhere, von Rumohr says trends were “mixed.” While Wall Street was expecting the company to burn through $4.3 billion of cash in the quarter, the cash outflow was “better than feared,” coming in at $3.7 billion. The BCA (Boeing Commercial Airplane) segment reported a loss of $856 million, higher than Cowen’s $800 million loss estimate. Boeing’s net debt also grew from $38 billion at the end of 2020 to $42.6 billion.
And there has been another glitch in getting the recertified 737 MAX back into action. The company has put a halt on deliveries of the jet due to an electrical issue that has resulted in part of the fleet being grounded again. The issue puts a dampener on Boeing’s latest plans to boost 737 MAX production to 31 planes a month by the beginning of next year.
All in all, von Rumohr reiterates a Market Perform (i.e. Hold) rating on Boeing shares, along with a $240 price target. The figure suggests shares will stay range-bound for the time being. (To watch von Rumohr’s track record, click here)
The rest of the Street, however, strikes a more positive note; with 8 Buys and 4 Holds, the stock boasts a Moderate Buy consensus rating. The average price target clocks in at $278.17, implying one-year upside of ~18%. (See Boeing stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
