Boeing (BA): "Crude" Reality Setting In, Target Slashed

Sky-high oil and the airline industy’s never-ending woes continue to batter Boeing (BA). AmTech is cutting their target price:

While BA boasts a robust 737 backlog, surging fuel prices will eventually result in delivery deferrals and potential cancelations. We are now forecasting 737 production to turn down in 2009 with a double-digit decline in 2010 and are thus cutting our 2009-2011 EPS estimates by $0.10, $0.55 and $0.35 to $6.75, $6.70 and $7.25, respectively. Our P/E multiple objective for BA has been reduced by 3 points to 10x, reflecting the bear market in aerospace and the likelihood that the OEM production cycle will begin to roll over stemming from cuts in narrow-body production.

The global economy not collapsing might be BA’s best hope:

The only good news is [this cyclical downturn] might not be as deep as past cycles given demand for aircraft globally has increased from previous cycles due to China , India and other rapidly developing economies.

AmTech maintains NEUTRAL on Boeing (BA), target price cut to $67.

See Also:
Boeing (BA) Clobbered By Airline Disaster, Goldman Cuts To SELL
Boeing (BA): Too Much Pressure From High Fuel Prices

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