BA - Embedded Expectations Analysis - 2019 03 01
The Boeing Company (BA:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 21.6x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about product mix, midsized airplane demand, their long-term R&D strategy, and airplane productionSpecifically, management may be concerned about their product mix between the 777 and 777X, and may lack confidence in their ability to sustain 777 orders, margin growth, and strong 2018 performance. In addition, they may be overstating commercial air traffic growth, the demand for new midsized airplanes, and their production capabilities. Moreover, they may have concerns about changes in their long-term R&D strategy and spending, and their ability to maintain 787 operating cash flow. Furthermore, they may lack confidence in their ability to strengthen vertical capabilities and manage production systems. Finally, they may be overstating the value proposition of fuel-efficient planes and may be downplaying lingering supply chain headwinds
The Boeing is an aerospace firm. The company's segments include: Commercial Airplanes, which develops, produces and markets commercial jet aircraft and provides fleet support services, mainly to the commercial airline industry; Defense, Space and Security, which engages in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance and mobility, vertical lift, and commercial derivative aircraft; Global Services, which provides supply chain and logistics management, pilot and maintenance training systems and services, and data analytics and digital services; and Boeing Capital, which manages overall financing exposure.
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