CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price of $209, cut $29, reflects a 25x multiple on our ’25 EPS estimate, well below BA’s three-year historical forward average of 40x, but merited, in our view, by what we see as rising regulatory risk. We widen our expected ’23 loss per share by $0.42 to -$5.75, trim our ’24 EPS estimate by $0.50 to $3.60, and trim ’25’s EPS view by $0.45 to $8.35. The WSJ has reported that the Boeing MAX-9 plug-type door at the center of the recent controversy was likely re-installed by BA without necessary bolts, and that there were lapses in process documentation. Meanwhile, BA has now withdrawn a previously-requested safety exemption for the yet-to-be-certified MAX-7. We believe this withdrawal reflects a “read the room” moment by BA management in light of BA’s ongoing quality control problems. The secular growth tailwind from an aging commercial aircraft fleet is still intact, but BA’s near-term focus needs to be solely on quality control, which likely mutes delivery cadence in ’24.