Buy Boeing on the dip, Sterne Agee says

Sterne Agee advises buying Boeing (BA +2.1%) on the recent pullback, as it reiterates its $164 price target for the shares based on very favorable free cash flow over the next several years.

With the long-term cash story still intact, Sterne views a 13x-15x multiple range on 2015 estimates as reasonable given peak cash generation is still two years later in 2017; BA historically has been able to support a 10x-12x peak free cash flow multiple during production upcycles, and the firm thinks this will occur again as production ramps through mid decade.

BA's ~5,100 aircraft backlog ensures visibility and flexibility within the production skyline that should result in sustained healthy valuation given the longevity of this aerospace cycle, the firm says.

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Comments (3)
  • GarryGR
    , contributor
    Comments (350) | Send Message
    The markets go up and down, but long term, obviously, they go up. If that were not true, the "market" would cease to exist. The long term trend is always up therefore Bears are only happy during the short term down turns; it's much more fun to be a Bull! Although, apparently, some seem to enjoy bad news far too much, to the point of only highlighting negatives while ignoring any positives! ;-)
    1 Apr 2014, 08:01 PM Reply Like
  • thomas85225
    , contributor
    Comments (552) | Send Message
    Boeing CEO will be retiring soon and several of Boeing top managers and engineers has been retired (slack)
    Who will be the next CEO of Boeing? Another Corporate Raider from GE


    Boeing has plenty of money for management salary and bounces but no money for R&D for new aircraft's or updating their factories


    Boeing military division makes up half of Boeing profits,


    Boeing may miss the boat if Boeing waits to offer the 737 MAX in 2017 and 777-X in 2020 and the 787-10 TBD that still on drawing board.


    Boeing is organized into five primary divisions:
    Boeing Commercial Airplanes (BCA), Boeing Commercial Headquarters is located in the City of Renton see


    Boeing Defense, Space & Security (BDS),
    Engineering, Operations & Technology,
    Boeing Capital and Boeing Shared Services Group.
    Boeing is building another HQ in Washington DC


    Boeing's total consolidated debt was $9.6 billion, yet its net pension liability was an even larger obligation at $10.4 billion.
    So Boeing will cut the workforce benefits to paid off Boeing debt ! see


    In the mild 1990’s CEO Phil Condit bought North American Aviation with all there divisors from Rockwell, Hughes Defense and Space and meager with McDonnell Douglas but Boeing has cut up and sold off these companies


    in late 1990’s the development cost of 777-200, 737NG, configuration software DCAC/MRM, O/2 when over budget by 14 Billions see


    Boeing sells fabrication plants


    The manufacturing infrastructure of Boeing has been sold off see


    Boeing commercial division has a backlog of 5,000 aircraft's but at current production rate this will be finish in six years


    The world will need 35,000 new commercial aircraft over the next twenty years but Boeing has yet to modernize if factories
    what will be the cost to update Everett and Renton assembly plants


    The Current Market Outlook
    see ;


    Airbus Global Market forecast 2012-2031 see ;


    Average Fleet Age for Selected Airlines seehttp://


    Many of Boeing Space and Defense program has come to an end Rockwell NAAO Space Shuttle and Sea launch ect
    Military program are coming to a end Northrop F/A-18, McDonnell F-15 , Douglas C-17
    The Kc-46 is 5,85 Billions over budget and one years late‎




    Boeing has cut production of the 747-8 that Boeing has only taken 120 orders and 64 deliveries that are two years late and 2.04 billion over budget and overweight over the next 20 years the airlines will need 35,000 new aircraft including 871 larger frightens aircraft


    With new no orders for 747-8 how much longer can Boeing kept the assemble line open and its subcontractor under contact, the 747 fuselage where build by Northrop in Hawthorne CA still 1997 when Northrop sold it commercial division to Vought


    The 787 was start on 2003 with 1030 orders 114 cancellation and only 132 delivery to date


    Many airlines are not replacing there exist Boeing aircraft, since Boeing CEO James McNerney, and GE CEO Jeff" Immelt are member of the board on the Import-Export Bank, that made better loan to foreign airlines at a lower interest rate
    Delta and other Airline Group have file law suits against the U.S. Export-Import Bank over Air India Loan Guarantees


    Delta CEO prefers stability over flash in airplane fleet


    JAL lines, Delta Air Lines, British Airways, Singapore Airlines, Lion Air, American Airlines, Mexican budget airline VivaAerobus , Air China, Philippine Air, Vietnam's VietJet, ANA (Discussions for A-350 Orders) are now ordering from Airbus


    Air India and Jet air has decided to sell five out of its eight Boeing 777-200 aircraft owing to changes in market dynamics due to the Global recession, steep increase in fuel prices and poor yields on non-stop routes, and the 777-200 being a gas Guzzler


    Boeing slows the pace on 777X


    The 777-X, 787-10 and 737Max are still on the drawing board
    Boeing has yet design and builds and test wing, flight test parts and test the parts or orders all the long lead items.


    Boeing production line is out dated,
    The 747 was design in 1961, 737 1966 base on the 707 of 1958,757 and 767 in 1972, 777-200 in 1989, 737NG in 1997, 737Max in 2005, 787-8 in 2003


    What does Boeing need with 747-8, 767-200,-300,-400, 777-200,-300, -8X, -9X , 787-8, -9, -10 all in the same over sea market and only the 737 in the domestic market
    Douglas solve this problem by offering the Dc-10 in both market with the Dc-10-10, -15, -30, -40, combi, cargo, freighter passenger with common nose, center and tail section all at the same time


    The ranges of 777-8X and -9X is only need on non-stop air route flying in and out of Singapore and Australia


    Boeing will need 27 Billions of tax payer money to build 259 777-X aircraft'shttp://bit.l... ;


    Everett that will not be ready for a few years ;


    The 777-200 was design in 1989 and the 777 only has 380 orders left to build at the production rate of 8.3 aircraft per month.


    The A340-500 was introduced as the world's longest-range commercial airliner and only 36 A340-500 has been sold.


    Boeing has only sold 120 747-8 and delivery 64 aircrafts since 2005
    (Boeing did not built the Double Deck 747-500, -600 in 1997 and in 1998 Airbus built the A380 that has 306 orders and 122 delivery to date)


    Boeing 777-X is coming to the market too late to complete with the A350



    The A-350 has 812 orders for the passenger version that will be delivery in 2015 and 118 orders for the freighter version
    see futu
    Boeing has been trying to offer an updated 777 since the 1995 Pairs Air Show with a 777-100 and Combi ;


    The Boeing 777-X files get updated Kangaroo-buster 777-8LX concept being studied by Boeing ...


    Boeing studies ultra long-range 777-8LX concept see


    Boeing Gets a Downgrade as 777X Success Shrinks 777 Orders ;


    Lars Andersen, the top 777 engineer who came out of retirement to act as consultant on the 777-X, left the project, unhappy about a shift in the program.


    Udvar-Hazy said the 777X needs further “design refinements” before he would consider ordering the aircraft. ;


    Boeing has a class-action suit over false claims about the 787, Dismissal of Boeing 787 class-action suit upheld see Boeing 787


    Dreamliner: a timeline of problems ;


    Boeing Dreamliner 787: A Timeline Of 6 Years Of Failure


    Boeing is writing late fee checks and out of services check to the airlines, 33 Millions to LOT airlines, 500 Millions to Air India ect


    Boeing Short-Circuiting 787 Shows Skills Gap, Norwegian Air Says


    Boeing only offer the 777-X and 787-10 after the A350-900 flew at the 2013 Paris Air Show and airlines are place orders for the A350-900 and the A380-800 aircraft's Airbus is now working on A-350 freighter, A350-1000, the updates A330 and the A380-900


    The Japan Recession in 1997 cause Boeing not to build the double-Decker 747-500 and -600 In 1998
    Airbus build the A380 with 324 orders and 124 deliveries to date


    The 747-8 has 120 orders and 64 deliveries since 2005


    Boeing has yet to build the Yellowstone aircrafts


    Boeing has the 747-8, 777, 787, and 767 all in the market and the airlines rarely used these aircraft's on domestic route


    The irony about the A320, A330, A340, A350, A380 and the Kc-30 are in production with parts being builds in factories once own by Boeing, Triumph Aero structures - Vought Aircraft Division and Sprit AeroSystems


    The 777-X, 787-10 and 737 Max are not in production Where is the market for the 777-X which as offer twice before alone with the 777-100 & combi in 1995 at the Pair air shown Boeing slows the pace on 777X see ;


    How many airlines will need a 777-X that can fly non-stop for 9,000 mile and carries 400 passengers?


    Air India and Jet Air is leasing out there 777 Air India has decided to sell five out of its eight Boeing 777-200LR aircraft owing to changes in market dynamics due to the Global recession, steep increase in fuel prices and poor yields on non-stop routes,


    Air Singapore Airlines (SIA) reported yet another disappointing quarterly results blaming on high fuel prices, stiff competition and an anaemic global economic recovery for its lacklustre financial performance,


    Boeing still must design and tests all the 777-X, 787-10 and the 737max parts and build flight test parts and flight test wing and build flight test aircrafts, 777-X, 787-10 for the FAA 18 month to 24 months flight test programs Aircraft Certification Procedures
    Boeing has yet to buy a high time 777-200, or -300 and installed the folding wing tips for the flight test program for FAA Certification of the 777-X to kept the aircraft as code E.


    Boeing stock is still $50 to $100 over price and the number of Boeing program is ending
    8 Apr 2014, 08:24 PM Reply Like
  • healthythoughts
    , contributor
    Comments (2988) | Send Message
    I think someone has a "bone to pick"....running out of red meat, my friend
    8 Apr 2014, 08:41 PM Reply Like
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