Global aircraft manufacturer Boeing (BA) announced that it will build a new 300,000-square foot facility in Illinois to manufacture the Navy’s first operational carrier-based unmanned aircraft, the MQ-25 Stingray.
The new facility will be equipped with state-of-the-art manufacturing processes and tools, along with robotic automation and the latest assembly techniques to improve product quality and employee ergonomics.
Moreover, the facility will bring the benefits of digital aircraft design and production to the Navy and proposes to create around 150 jobs on the company’s southwest Illinois campus. (See Boeing stock charts on TipRanks)
The Boeing-owned, digitally engineered MQ-25 test asset has been undergoing flight testing from the MidAmerica St. Louis Airport for the last two years.
Kristin Robertson, VP and GM of Autonomous Systems, Boeing Defense, Space & Security said, “The team and state-of-the-art technology we’re bringing to the Navy’s MQ-25 program is unprecedented, and we’re incredibly proud to be expanding both as we build the future of autonomous systems in Illinois.”
The U.S. Navy will be procuring a minimum of 70 MQ-25 aircraft from Boeing, most of which will be manufactured at the new facility. The Navy aims to extend the range of the carrier air wing with the new aircraft.
Currently, seven MQ-25 aircraft and two ground test articles are being built at Boeing’s St. Louis facilities, which will be transported to MidAmerica for flight tests.
The MQ-25 program office, with its core team, will continue to be based in St. Louis. The new facility is in addition to the already operational manufacturing facility at Boeing St. Clair, which manufactures parts for the CH-47 Chinook, F/A-18 Super Hornet, F-15, and other defense products.
After meeting with Boeing’s new CFO Brian West, Vertical Research analyst Robert Stallard reiterated a Hold rating on the stock, with a price target of $250, implying 20% upside potential to current levels.
The analyst said that the CFO expressed concerns about reducing debt to more reasonable levels, which are similar to that of CEO Dave Calhoun’s concerns.
Stallard also stated that Boeing needs to sort its operational issues to boost cash flows. The analyst believes that Boeing needs to undertake numerous steps to resolve the issues before management will feel comfortable providing financial guidance and other targets.
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating, based on eight Buys and six Holds. The average Boeing price target of $278.07 implies 33.4% upside potential to current levels. Shares have gained 36.5% over the past 12 months.
Related News:
Ford Begins Pre-Production of F-150 Lightning as Demand Surges
GM Suspends EV Bolt Production to Mid-October – Report
Goldman Sachs Inks $2.24B Deal to Buy GreenSky
