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Published byPamela Lydia Leonard Modified over 9 years ago
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11/28/12
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Company Description Sector: Industrials / Industry: Aerospace & Defense 3 Main Divisions: 1. Commercial Airplanes ~ 60% of revenues 2. Defense, Space, and Security ~ 40% of revenues 3. Boeing Capital Corporation < 1% of revenues Geographic Sales Breakdown: A. US ~ 50% of revenues B. Asia (including China) ~ 18% of revenues C. Europe ~ 14% of revenues Competitors: Airbus (subsidiary of European Aeronautic Defense and Space Company) Lockheed Martin (LMT) Northrop Grumman (NOC)
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Quick Stats Current Price: $74.09 Market Cap: $55.87B Enterprise Value: $56.32B Beta: 1.04 52 Week Price Range: $66.82 - $77.83 Div Yield: 2.40% Income Statement Statistics: Revenue (ttm): $78.95B Quarterly Revenue Growth (YoY): 12.90% EBITDA (ttm): $7.73B Profit Margin (ttm): 5.47% Net Income (ttm): $4.31B Valuation Statistics: Trailing Price / Earnings Ratio: 13.05 Forward Price / Earnings Ratio: 14.56 5 Yr Growth Estimate: 11.90% Prices / Sales Ratio: 0.71 Price / Book Ratio: 15.66 Enterprise Value / EBITDA: 7.28 Balance Sheet Cash: $11.12B Debt: $11.19B
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Investment Thesis Beginning to Ride the Powerful Aerospace Cycle Recent Earning Have Been Stellar and Stock Still Cheap Because of Over-Heightened Defense Spending Cut Headwinds Huge Backlog and Solid and Increasing Dividend Makes Boeing a Safe Play
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Boeing Regaining Market Share
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Boeing’s Impressive Airplane Deliveries
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Stellar Earnings Outpacing Estimates
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Boeing’s Huge Backlog Backlog stands at $378 billion including 4,100 unfilled commercial airplane orders Would take over 7 years to clear this backlog out!
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Steadily Increasing Dividend Current Dividend = 2.40%
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Industry/Peer Analysis
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Risks 1. Expected Defense Cuts in Washington However… A. Implemented cost cutting B. 25% of DSS revenues are international 2. Expenses Tied to Fuel Costs Huge operating expense ~ 1/3 of total expenses 3. Pension and Health Care Benefits Currently have ~ $24 billion in accrued liabilities
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Conclusion/Price Target Boeing will continue to blow out earnings, pushing the P/E ratio down, until the stock becomes too cheap that the price will have to go up 12 month price target of $90, representing a 21% gain
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