Analysts: Boeing Investor Day ‘Bullish,’ ‘Frustrating’

Boeing’s (BA) shares rose yesterday following its investor day, in which it said it would seek to become more like Apple (AAPL). Today, the gains are continuing as investors digest the meat of the presentation.

Reuters

Morgan Stanley’s John Godyn and team called Boeing’s presentation “bullish on balance.” They explain why:

Consistent with our expectations heading into the event, BA’s investor day was characterized with upbeat commentary, albeit few hard numbers, on key bull-case themes including capital returns, OE cycle fundamentals, and Partnering for Success. More directly related to the stock’s performance through year-end, we left with more confidence in: (1) an uptick in 777 orders, (2) margin beats and (3) continued, elevated buybacks if the stock languishes. 787 deferred production tracking above $25B is a risk this year – but one which appears increasingly well-vetted by an investor base looking to buy dips. As such, we reiterate our Overweight on shares…

JPMorgan’s Joseph Nadol and team call the lack of details on the 787 ‘frustrating.’ They explain:

 Management focused on productivity and cost control at this year's investor meeting, and given the success of Partnering for Success thus far, we see potential for Boeing Commercial Airplanes (BCA) margins to continue to surprise to the upside in the coming quarters and years. However, most of the commentary was qualitative, so it is difficult to pinpoint the earnings opportunity. The path to a 787 deferred production peak of $25 bn by year end was another topic of interest coming in, but Boeing offered little additional data beyond remaining committed to the target. The next meaningful data points should be Q2 and Q3 earnings reports in July and Oct, and we continue to assume Boeing will roughly achieve its guidance on this front, though the investor meeting did nothing to increase (or decrease) our confidence level.

And no mention of Apple in either one.

Shares of Boeing have gained 0.9% to $132.19 at 10:24 a.m., while fellow jet makers Embraer (ERJ) and Airbus (EADSY) have risen 0.9% and 0.6%, respectively. Shares of Apple have dropped 0.2% to $605.25.