On Tuesday, Jefferies reaffirmed its Buy rating for Boeing (NYSE:BA) with a consistent price target of $270.00. The report noted Boeing's continued delivery momentum, with 31 737 MAX aircraft delivered in August, closely following the 32 delivered in July.
Despite a temporary production halt due to component issues, Boeing's 737 production was around 25 per month in June and July, with a year-end target of 38 per month.
The production figures for August suggest a slight decrease from the 2023-2024 high of 39 units produced in June 2023. Jefferies' estimates had accounted for a slower ramp-up, with an average of 18 per month in Q2 and an expected 28 per month in Q3. However, achieving the implied 36 for September appears unlikely.
The report also highlights that 70% of the 737 MAX inventory has been modified, with four additional aircraft adjusted in the past four weeks.
The resumption of deliveries to China in July has contributed to the inventory reduction, with 99 of the parked Chinese aircraft, or 70%, now reactivated. This includes 56 aircraft that have either received new Chinese registration or retained their original one, with 31 of those having been delivered. Indian registrations have also increased, particularly for Air India Express, which received 31 of the 34 aircraft delivered.
In terms of widebody aircraft, August saw steady rollouts with an improvement in 787 deliveries. One 767 was rolled out, with a confirmed delivery of a 767-300F and potential deliveries of up to two KC-46s. The 777 program had three rollouts, including one 777X, and three deliveries, with an estimated nine 777Fs remaining undelivered. The 787 program enjoyed five rollouts and four deliveries, leaving 61 undelivered 787s.
Boeing is set to report its August deliveries on Tuesday, September 10th, at 11 AM. The anticipated delivery count for August is between 39 and 42 aircraft, including the 31 737 MAXs, which compares favorably to the delivery figures from the beginning of the year through July.
In other recent news, Boeing has been maintaining a steady pace in aircraft production, with Goldman Sachs and Deutsche Bank reaffirming their Buy ratings on the aerospace company's stock. The company delivered a total of 42 aircraft in August, matching its July performance. This comes as Boeing appears to be increasing its aircraft deliveries, marking August as the third consecutive month with 40 or more aircraft delivered.
The uptick in deliveries is seen as a sign of Boeing's recovery, as the company has been focusing on improving product quality in the first half of the year. The report also highlighted that the last few months of the year typically show seasonal strength, suggesting that Boeing's delivery numbers could continue to rise in the fourth quarter.
However, Boeing's CEO, Kelly Ortberg, has been engaging with the FAA about the company's commitment to safety and ongoing regulatory challenges. This follows the FAA's decision to prevent Boeing from increasing production rates for its top-selling 737 MAX aircraft.
In other developments, Boeing's Starliner spacecraft has faced technical issues, including helium leaks and thruster problems, which have necessitated further data collection and system improvements for future flights. Lastly, ex-lawyer Tom Girardi has been convicted of wire fraud, with implications involving misappropriated funds meant for the families of victims of a 2018 Boeing 737 MAX crash.
InvestingPro Insights
As Boeing (NYSE:BA) continues to navigate through its production and delivery schedules, Jefferies maintains a positive outlook on the company with a Buy rating and a $270.00 price target. In light of this, recent InvestingPro data and insights could provide additional context for investors. Boeing's market capitalization stands at approximately $98.8 billion, reflecting its significant presence in the aerospace industry. Despite a challenging period, the company has managed to generate $73.56 billion in revenue over the last twelve months as of Q2 2024, although this represents a slight decline of 0.07%.
InvestingPro Tips highlight that Boeing may face difficulties with its interest payments on debt and has seen eight analysts revise their earnings downwards for the upcoming period, which underscores the financial pressures the company may be facing. Additionally, the company has been identified as a prominent player in the Aerospace & Defense industry, which could be a key factor in its recovery and future growth. With the stock trading near its 52-week low and exhibiting high volatility, investors should be aware of the potential risks and opportunities associated with Boeing's shares.
For those looking for more in-depth analysis, there are 9 additional InvestingPro Tips available for Boeing, which can be accessed for further guidance on the company's financial health and stock performance. These tips and metrics can be an invaluable resource for investors looking to make informed decisions in the aerospace sector.
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