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11/28/12. 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:

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Company description
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)


Quick stats
Quick Stats

  • 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

  • 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


Investment thesis
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





Boeing s huge backlog
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!


Steadily increasing dividend
Steadily Increasing Dividend

Current Dividend = 2.40%



Risks
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


Conclusion price target
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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