Other stocks here
BA, cashflow returns to positive
Current 194 Target 267 +37%
January 27, 2022
1 minute read
Sales declined -3%
Costs up slightly, profit down on non cash costs
Cashflow turns positive
Balance sheet lower leverage
Valuation, a 15% higher target price
1 minute read
Sales declined -3%
- Sales declined -3% in the fourth quarter to 14,793 million dollars vs our 17,570 million dollars forecast.
- This brings the quarterly average to -1% growth.
- We predict average growth of 8% in this next 12 months to bring sales to 19,696 million dollars in the fourth quarter of 2022.
Costs up slightly, profit down on non cash costs
- The cash cost ratio went from -96% to -95% profit from -132 to -4,164 million dollars in the fourth quarter on non cash costs.
- The average cost ratio is at -94% now.
- We use lower -91% cost ratio to predict a 916 million dollars profit in the fourth quarter of 2022.
Cashflow turns positive
- Free cashflow turned positive from -507 to 494 million dollars in the fourth quarter with -222 million dollars investment spending.
- Average quarterly Cashflow is at -1,099 million dollars now.
- We assume the same -222 million dollars investment spending which with higher sales gives a 1,506 million dollars Cashflow in the fourth quarter of 2022.
Balance sheet lower leverage
- Cash declined 9,764 to 8,052 million dollars in the fourth quarter.
- Liabilities declined 161,112 to 153,398 million dollars so net cash improved -151,348 to -145,346 million dollars
- With our forecast cashflow & a -862 million dollars equity payout -4,371 million dollars liabilities payment net cash will be -140,975 million dollars in 12 months time.
Valuation, a 15% higher target price
- BA capital paid from the last 28 quarters improved 1,123 to 5,485 million dollars in the third quarter with 11,032 million dollars new liabilities & a-15,384 million dollars equity payout & will be 10,718 million dollars in12 months time.
- At the current market value of 114,200 million dollars based on our forecasts it’s at 0.84 X assets with a 25 years payback & a 1% yield.
- Our cashflow forecast is 5,233 million dollars which means an 22 X valuation. A 30 X valuation gives a 37% higher target price of 267 dollars.