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 $164, cut $8, reflects a 24x multiple of projected 2025 EPS. The applied multiple is slightly below BA’s long-term historical forward average, but merited, in our view, by high regulatory risk. We cut our 2024 EPS estimate by $1.42 to $1.75 and 2025’s by $0.32 to $6.85. BA has delivered just 54 commercial aircraft in the first two months of Q1, a sharp slowdown from 79 units in the same period of 2023. In our view, this is reflective of the FAA-imposed slowdown on BA’s flagship 737 MAX production line, and it is too early to determine when that slowdown may end. We think BA has a long road ahead of it to restore its reputation for engineering quality, but the recent move of appointing Steve Mollenkopf as Chairman of the Board is likely a step in the right direction, given Mollenkopf’s engineering background. We think chief rival Airbus (AIR FP EUR172 *****) will add to its market share lead over BA in commercial aircraft in 2024.