Boeing paying premium for Spirit AeroSystems ‘seems unlikely,’ says Truist

Following a Wall Street Journal report that says Boeing (BA) is exploring the possibility of acquiring Spirit AeroSystems (SPR), Truist says that “at this stage it is unclear to us why BA would pay a premium” to acquire Spirit, should a deal come to fruition, given that both are under intense scrutiny by the FAA following a spate of quality control issues and that Boeing owns the intellectual property for work performed by Spirit for its platforms. The firm estimates that if Spirit is acquired by Boeing at about nine times the firm’s 2025 EBITDA estimate of $913M, the enterprise value of $8.2B would equate to about $30-$31 per share after netting out debt and $1.4B of Boeing-related liabilities. The firm maintains a Hold rating and $30 price target on Spirit shares, which are up $3.95, or 14%, to $32.55 in Friday afternoon trading.