Boeing has a “seemingly limitless capacity to disappoint” on its new 787 Dreamliner, a program beset with problems and delayed five times, said Macquarie Securities analyst Rob Stallard in a new report issued today.
It also has a “stubborn resistance” to move down production rates in 201, athough Stallard thinks it will eventually occur because of airline deferrals and minimal order intake.
Boeing also has a “below-average defense division and cash flow concerns,” he said. “Boeing seems to be the stock that people love to hate.”
Still, despite all the issues, the company continues to show remarkable resilience, and Stallard wrote. He thinks value investors will still be attracted to the “relatively cheap” stock.
“However, we think that the ongoing issues with the 787 are likely to limit the upside potential for the stock until something actually goes right with the program,” he wrote.
Stallard has placed a 12-month price target for Boeing stock at $50 per share and lists it as “outperform.”