The Seattle-based aerospace company said that it expects Chinese aircraft demand to increase to 6,330 over the next 20 years, despite signs that the country's economy is slowing down.
"Despite the current volatility in China's financial market, we see strong growth in the country's aviation sector over the long term," said Randy Tinseth, VP of marketing at Boeing Commercial Airplanes.
The company expects that China's commercial plane fleet will about triple over the next 20 years to 7,210 aircraft in 2034 from 2,570 last year.
Separately, the company announced yesterday that it has started issuing notices for what could potentially be hundreds of layoffs at its satellite business, according to the Wall Street Journal.
The company said the move was in response to the stalled reauthourization of the U.S. Export-Import Bank (Ex-Im), which supports many of its sales, as the country looks to add regulatory checks to the credit agency.
The agency is one of many around the world that guarantees loans taken out by foreign companies to purchase goods exported from that country.
Congress allowed Ex-Im to expire on June 30 without renewal before leaving for their summer recess.
TheStreet Ratings team rates BOEING CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOEING CO (BA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BA's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Aerospace & Defense industry and the overall market, BOEING CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 82.25% to $3,297.00 million when compared to the same quarter last year. In addition, BOEING CO has also vastly surpassed the industry average cash flow growth rate of 26.15%.
- BOEING CO's earnings per share declined by 29.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOEING CO increased its bottom line by earning $7.40 versus $5.97 in the prior year. This year, the market expects an improvement in earnings ($8.05 versus $7.40).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: BA Ratings Report