Should You Buy It: Spirit Aerosystems

Spirit Aerosystems (SPR - commentary - Cramer's Take) has had its wings clipped in 2008. At Wednesday's closing price of $20.59, the stock is down 40% year-to-date.

The company, which went public in late 2006 at $26, makes fuselages and wings for airplanes, dealing primarily with Boeing (BA - commentary - Cramer's Take). Sales rose an impressive 21% in 2007, while EPS rose to $2.13 after a net loss in 2006.

Analysts think sales might rise another 13%-15% this year, while EPS should rise at least 10% this year.

Spirit generates about 85% of total revenue from Boeing, and is currently contracted to build the nose section of Boeing's 787 Dreamliner. There have been a lot of questions swirling around the timing of the launch the 787, and how airlines struggling with rising fuel costs will continue to buy new aircraft.

But just Wednesday, Boeing lifted its 20-year forecast for industry-wide commercial jetliner deliveries by 2.8%, as customers look to upgrade their fleets to more fuel-efficient models. If that pans out, demand for Spirit's gear should stay robust over the long-term.

As it stands, Boeing and Airbus are still working through a considerable level of backlog, so results for Spirit should stay firm throughout the next two years, regardless of the current difficulties among air carriers. That helps explain why 2008 consensus EPS forecasts have actually risen in recent months.

With that in mind, I'm here to answer readers' questions: Should you buy it? Can shares of Spirit Aerosystems rebound, or will the stock remain grounded?

Spirit doesn't play favorites with Boeing. On Monday, the company won a $1.7 billion contract extension with Airbus to design and build a wing piece for the company's new A350 mega-jet, as well as projects for the Airbus' other aircraft. Back in May, Spirit was also awarded a contract to build a fuselage section for the A350, which is expected to hit the market in 2013.

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David Peltier is a research associate at TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback; click here to send him an email.

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