Buy Boeing on the dip, Sterne Agee says

|About: The Boeing Company (BA)|By:, SA News Editor

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.