Will Boeing (BA) Stock Be Helped By Delta Air Lines (DAL) Support Of Export-Import Bank?

NEW YORK (TheStreet) -- Boeing Co.  (BA) shares may be helped by support from Delta Air Lines  (DAL) CEO Richard Anderson who is expected to back the Export-Import Bank of the U.S. providing some support for sales of Boeing's biggest jets, softening his stance even as the agency's political critics step up a campaign to have it abolished, the Wall Street Journal reports.

Delta has been the staunchest of airline-industry critics of the Ex-Im Bank, arguing that the bank's support for sales of Boeing widebody jets gives rival carriers overseas an unfair advantage by reducing their finance costs, the Journal said.

Now Anderson plans to use a speech at the Aero Club in Washington, D.C. today to distance the company from the calls of some Republicans and small-government advocates for the bank to be wound down, arguing it has a vital role in preserving U.S. manufacturing jobs, the Journal added.

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Shares of Boeing are slightly lower in pre-market trade.

 

TheStreet Ratings team rates BOEING CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOEING CO (BA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. We feel these 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 3.2%. Since the same quarter one year prior, revenues slightly increased by 8.3%. 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.
  • Net operating cash flow has significantly increased by 112.21% to $1,112.00 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 43.98%.
  • Compared to its closing price of one year ago, BA's share price has jumped by 29.89%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • BOEING CO's earnings per share declined by 11.1% 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 $5.97 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($7.65 versus $5.97).
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: BA Ratings Report

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