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 remains $194 on P/E analysis. The WSJ reported today that BA is in discussions to acquire key supplier Spirit AeroSystems Holdings (SPR 33 ***). Should a deal occur, it would bring BA’s relationship with SPR full circle, since SPR was spun off from Boeing in 2005. We believe the motivation for any such deal is quality control, as an in-house SPR would likely be easier for BA management to monitor. Given the recent history of manufacturing snafus in both enterprises, as well as the Federal Aviation Administration’s requirement that BA deliver a go-forward plan to address safety deficiencies in 90 days, we think BA is turning over every stone to prevent more defects from occurring. We note possible complications for Airbus (AIR FP EUR153 *****), given that SPR also produces fuselages for Airbus. SPR earned $1.1B in revenues from Airbus in 2023, and we estimate that SPR comprised about 2.5% of Airbus’ opex in 2023 in its commercial aircraft business.