BA: Sit Tight While Boeing Experiences Turbulence

Advertisement

Earlier this year Boeing (BA) struggled to gain momentum after setbacks related to the 787 Dreamliner. Now that the aerospace giant has released Q3 earnings, has Boeing put its 787 troubles behind it?

Company Profile

Boeing logo

Boeing is one of the world’s largest aircraft manufacturers in the world, and it also claims the title of being the U.S.’s largest exporter.

Founded in 1916, Boeing serves both commercial airlines as well as air-, land- and sea-based militaries around the globe. In 2013, Boeing brought in over $86.6 billion in total sales on $4.59 billion in profit, and it is headed towards 3.4% annual sales growth and 17.1% earnings growth this year.

Earnings Rundown

In the third quarter, Boeing reported an 18% year-on-year jump in quarterly profit and increased its core earnings forecast for the year. Revenue increased to $23.8 billion due to higher deliveries. Boeing earned $1.36 billion, or $1.86 per share, up from $1.16 billion, or $1.15 per share, last year.

Core earnings before pension contributions rose to $2.14 per share from $1.80 per share last year, beating analyst estimates of $1.97 per share. Boeing’s operating cash flow before pension contributions totaled $1.7 billion.

During the third quarter, Boeing also repurchased 8 million shares for $1 billion. Unfortunately, even with a solid Q3 earnings report, BA shares fell on Tuesday. Analysts expressed concerns over the increasing production costs of the 787 Dreamliner and whether this could weigh on profit going forward.

Current Ratings

Boeing had a very strong run through the end of 2013, but momentum has slowed in 2014. Boeing continues to experience weak institutional buying pressure. So, BA stock currently earns a “D” for its Quantitative Grade.

Meanwhile, of the eight metrics I graded it on, Boeing receives “As” on four: earnings growth, earnings surprises, analysts earnings revisions, and return on equity. Boeing receives solid “B” grades for operating margin growth, earnings momentum, and cash flow. Sales growth seems to be an area where Boeing needs to improve, earning a “D.” Overall, BA stock averages a “B” for Fundamental Grade.

As of this posting, Oct. 23, I consider Boeing a “C-rated hold.” Due to increased volatility, I recommend waiting to enter BA stock.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip GrowthEmerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/ba-sit-tight-boeing-experiences-turbulence/.

©2024 InvestorPlace Media, LLC