Boeing, plane sales recovering
Target price USD238
Last 12-month cashflow -USD 19.7 billion
February 14th,, 2021
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- Sales increased +8% in the fourth quarter to USD 15.3 billion after +20% in the second quarter, but 10% below forecast.
- The main commercial plane sales jumped by +31%!
- Average quarterly growth is back to -2%. We expect average growth to be +9% this next 12 months & sales to rise to USD 21.2 billion by the fourth quarter 2021.
- Cashflow was a lesser negative -USD 4.3 billion in the fourth quarter, from -USD 5.1 billion in the third quarter. Average quarterly Cashflow is now -USD 4.9 billion.
- Investment spending was lower, USD 265 million. We use an even lower USD 143 million.
- Combined with higher sales, this gives an average quarterly Cashflow +USD 1.5 billion this next 12 months.
Plane sales jump another +31%, expecting continued recovery, positive cashflow & a higher target price...
- With negative cashflow, the fourth quarter balance sheet leverage of cash minus total liabilities increased to -USD 162.5 billion from -USD 162.3 billion in the third & -USD 132.4 billion a year ago.
- With our forecast for some positive free cashflow & assuming a dividend of USD 1.18 billion...
- ...net cash will be -USD 157.7 billion in 12 months time.
- The net loss was -USD 8.43 billion in the fourth quarter from -USD 466 million in the third quarter from higher non-cash costs.
- The cash costs ratio of net profit add non-cash costs minus sales as a percent of sales was 104%.
- We use average costs 91% as sales recover, to predict a next 12 months profit, +USD 3.94 billion.
- Boeing cumulative capital paid has turned negative now for the last six years.
- At the current market value of USD 123 billion, it’s 1.64X sales, only 0.39X assets, with negative equity, no profitability yet & a 1% yield.
- Our free cashflow forecast is USD 7.4 billion. At 1.6% with a big 0.3X adjustment gives a higher target price of USD238.