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Benchmark analyst Josh Sullivan cut the price target on Boeing (NYSE:BA) shares to $200 per share from $250 on several headwinds, namely macro concerns, Chinese 737 re-certification, 737-10 FAA certification, and 777x development time-lines.
Still, the analyst’s Q2 EPS estimate of ($0.08) remains ahead of the street at ($0.13). Overall, Sullivan remains bullish on Boeing shares, hence the Buy rating is maintained.
“The multi-year water torture of internal supply side negative news from Boeing is at an inflection point, as CEO Calhoun indicated in June at a conference. This was recently supported by the better than expected 737 deliveries for 2Q as well as an affirmation that the 737 supply chain production is at the previously projected 31/month. The 787, which hasn’t been delivered in a year with +100 units in inventory, is also progressing towards FAA approval and could begin deliveries this summer,” Sullivan told clients in a note.
The analyst also noted very strong demand for global air travel.
All-in-all, Sullivan remains bullish as “the structural consumer shift to services including air travel remains all while BA regains the initiative.”
