This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Boeing to Take Off With Commercial Transition, Says Drexel Hamilton

NEW YORK ( TheStreet) -- Boeing (BA ) shares were up about a half a percent in Monday trading after Drexel Hamilton analysts said they expect the aircraft producer to take off as the company weans itself from military contracts and transitions into commercial spheres.

Drexel Hamilton raised its price target for Boeing shares $10 to $120. Shares were up 0.6% in afternoon trading Monday, reaching $104.77 a share.

Drexel Hamilton analysts in a note Monday raised their earnings estimates by 9 cents in 2013 to $6.61 a share and 20 cents in 2014 to $7.54 a share.

The analysts are basing their improved outlook on the announcement of new commercial models and increased orders on available commercial jets. Boeing had only made one delivery on its 787 model in the first quarter, but sales have grown to 16 in the second. The company has announced that larger and improved 777s and 787s are to be released, continuing a trend of single aisle aircrafts as the twin-aisled 747 build rates fall.

The aerospace company faced obstacles in their military contracts as the armed forces have begun to purchase F-35 fighter jets. Lockheed Martin's (LMT ) F-35 Lightning II has replaced the F-15 Super Hornet and F-18 Eagles made by Boeing and their subsidiary McDonnell Douglas. The F-35 has been deemed a next-generation fighter capable of ground attack, reconnaissance and air defense missions. The jet has stealth capabilities and the F-35B variant is able to complete short take-offs and vertical-landings.

While vehicles such as the anti-submarine aircraft P-8 Poseidon have been ordered by allied militaries, the F-15 and F-18 appear to be obsolete, analysts said.

"Prospective F-15 and F-18 candidate allied militaries increasingly look sucked into the F-35 vortex," wrote Drexel Hamilton analyst Richard Whittington in a July 8 note.

Boeing maybe outgunned in the jet class but its larger military aircrafts are expected to cushion the revenue blow. The company still maintains its contracts to provide the U.S. military with refueling and transport vehicles such as the KC-46A, the C-17 Globemaster III and the CH-47 Chinook helicopter. The tilt rotor V-22 Osprey will continue to operate with Marine Corp, Army Special Operations and Navy personnel.

"This aircraft is the single most significant transformation of air force special operations since the introduction of the helicopter... nearly every mission we have faced in the last 20 years could have been done better and faster with the V-22" said Air Force Lt. Gen. Donald Wurster of U.S. Air Force Special Operations Command in January of 2012.

Whittington gives Boeing a buy rating with a $120.00 price target. Shares have fluctuated within a 52-week range of $68.17 and $104.08. Boeing has a market capitalization of $77.6 billion.

-- Written by Robert Arenella in New York

>To contact the writer of this article, click here: Robert Arenella.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BA $134.01 -0.59%
LMT $233.24 0.37%
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs