Morningstar analyst Burkett Huey assigns Boeing a wide moat, putting fair value for the stock at $249.
Boeing (BA) – Get Boeing Company Report shares haven’t suffered much from the deadly March 21 crash of its 737-800 jet in China.
The stock did slide 4% on March 21. But it has rebounded 4% from that day, recently trading at $193.95.
The Action Alerts Plus team notes that Boeing shares benefited Wednesday from news that China Southern Airlines (ZNH) – Get China Southern Airlines Co. Ltd. Report said it plans to take delivery of 103 737 MAX jets through 2023, including 39 this year.
Further, on Thursday, ASL Aviation Holdings announced an order for up to 20 additional 737-800 Boeing Converted Freighters.
“Positive momentum for the company’s order book bodes well for rising production levels, margins, and earnings per share in the coming quarters,” the AAP team wrote.
Morningstar analyst Burkett Huey is bullish on Boeing, assigning it a wide moat. He puts fair value for the stock at $249, up from its recent quote of $193.95.
“Boeing finally has a near-term timeline for putting to bed the problems that have plagued the company over the past three years,” he wrote in a January commentary.
“While we can’t be sure if any other problems will rear their head, the 737 and 787 programs comprise about 60% of our justified enterprise value of the company, so incremental problems on other programs seem unlikely to be as material as the problems already faced.” It looks like the storyline for both the 737 and the 787 is improving.
“Boeing’s narrow-body business is bruised after the extended grounding of the 737 MAX, but we anticipate that the structural tailwinds driving narrow-body demand, particularly the development of emerging-market economies, will continue as the world emerges from the Covid-19 pandemic.”
Moreover, “We think Boeing’s commercial deliveries will sustainably return to 2018 levels in 2026,” Huey said.
