Boeing Is Just Killing It

| About: The Boeing (BA)

Yesterday, I wrote about a great American manufacturing icon, Ford (NYSE:F). The auto manufacturer is starting to hit on all cylinders and the stock should move higher still even after a nice run in 2013. Today, I want to discuss another United States manufacturing giant that is just killing it right now. That company is Boeing (NYSE:BA).

Despite much publicized problems in rolling out the new Dreamliner, the company's business is humming along as demonstrated by its recent results in its just reported quarterly earnings. In addition, the stock continues to garner positive catalysts.

Earnings Results:

  • The company posted earnings of $1.80 a share, a quarter per share above expectations.
  • Revenues came in at $22.1B, more than $400mm above consensus.
  • Backlog increased to a record $415B up from $410B in the last quarter.
  • Core operating margin rose 70 bps.
  • Finally, the company raised its current year EPS guidance to a range of $6.50 - $6.65 a share, up from $6.20 - $6.40 a share previously.

Positive Catalysts:

  1. Deutsche Bank immediately raised its price target to $156 a share from $130 after the company reported results.
  2. The company also just landed over $20B in commitments for its planes in China.
  3. In addition, the airline manufacturer just won a $3.7B order from Korea.
  4. Finally, based on earnings results and the company's upward revision to earnings guidance; look for analysts to raise earnings estimates and price targets on the shares over the next week. This obviously will be a positive for the stock.

Outlook: The company is in the early innings of rolling out the Dreamliner, its most important product in over a decade. As this rollout gathers speed and as production kinks get worked out;earnings, revenues & margins should expand significantly over the next several years. We are in the early stages of that cycle. In addition, the company is primed to ride the long term tailwind of increasing air travel in emerging markets which should play out over the next couple of decades.

The company has a robust balance sheet with a net cash position on the books. Earnings estimates have increased consistently for FY2013 & FY2014 over the past three months which should continue after this stellar earnings report. Revenue growth is expected to double next year in the 8% to 10% as the company increases its plane output. The shares go for under 10x operating cash flow and ~17x forward earnings (just slightly above the overall market multiple). The stock also pays a 1.6% dividend yield.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in BA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.