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On Friday, Vertical Research Partners maintained a Hold rating on Boeing stock (NYSE:BA) with a steady price target of $160.00, below the current trading price of $178.50. The firm's analyst, Robert Stallard, pointed out that the significant losses Boeing incurred in the fourth quarter were anticipated due to the IAM strike and the expected additional Defense charge. With a market capitalization of $133.55 billion and negative EBITDA of -$3.99 billion, Stallard's analysis suggested that these developments, while not surprising to investors, should not be overlooked. According to InvestingPro analysis, Boeing appears overvalued at current levels.
The analyst highlighted that the additional $1.7 billion in Defense charges will negatively impact Boeing's future cash flows, a crucial metric for investors. Despite the losses, the firm's stance remains unchanged. With a weak gross profit margin of 3.62% and an overall Financial Health Score rated as WEAK by InvestingPro, Stallard conveyed a cautious perspective on Boeing's future, referencing CEO Kelly Ortberg's remarks on the considerable efforts still required for the company's recovery.
Stallard's comments underline the challenges Boeing faces, noting, "A major loss related to the IAM strike had already been factored into our estimates, and industry press reports had suggested that yet another Defense charge was incoming." With nine analysts recently revising earnings estimates downward and the next earnings report due on January 28, he further elaborated on the implications of the fourth-quarter losses for investors and the company's valuation. Discover more insights and 8 additional ProTips with a subscription to InvestingPro.
The statement from the CEO, "there remains hard work ahead," was cited by Stallard as a reason for maintaining the Hold rating on Boeing stock. The firm's position reflects a watchful approach to Boeing's progress in addressing its recent financial setbacks.
In summary, Vertical Research Partners reaffirmed their Hold rating on Boeing, with no change to the price target, despite acknowledging the substantial losses reported in the fourth quarter. The analyst's commentary serves as a reminder of the hurdles Boeing continues to face and the importance of cautious optimism for the company's path forward.
In other recent news, Boeing Co . has experienced a series of financial and operational challenges. The company's fourth-quarter results revealed expected losses due to strikes and program charges, with the Commercial Airplanes segment projecting a revenue of $4.8 billion and the Defense, Space & Security division anticipating pre-tax earnings charges totaling $1.7 billion. Citi analysts have adjusted their outlook on Boeing stock, reducing the price target slightly to $207.00 but maintaining a Buy rating. Despite these challenges, Boeing has resumed production of its 737, 767, and 777/777X aircraft models and plans for the first delivery of the 777-9 aircraft in 2026.
Boeing's potential sale of its Jeppesen navigation unit has attracted interest from major aviation suppliers and private equity firms. This sale is part of Boeing's strategy to streamline its operations and focus on its core businesses. In the meantime, Barclays (LON:BARC) upgraded Boeing stock from Equalweight to Overweight, expecting sustained positive momentum in production and deliveries throughout 2025.
In 2024, Boeing's annual deliveries fell to their lowest level since the COVID-19 pandemic, with the company delivering 348 commercial jets, a significant decrease from the previous year's 528. Despite a difficult year, Ryanair Holdings (NASDAQ:RYAAY) Plc, the largest European operator of Boeing's 737 Max, expects the company to regain its competitive edge with the anticipated return of Donald Trump to the White House. These are the recent developments at Boeing Co.
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