NEW YORK (TheStreet) -- Shares of Boeing Co. (BA) closed down 3.87% at $124.64 on heavy trading volume after the aerospace company said it would reduce monthly production of its 747-8 jetliner to 1.3 aircraft a month from 1.5 in September 2015, bringing annual deliveries to approximately 16 from 18, the Wall Street Journal reports.
The four-engine 747, with its distinctive hump, has long been an icon of international jet travel, but demand has dwindled as airlines have opted for smaller, twin-engine jetliners and the need for big cargo freighters has ebbed, the Journal said.
Separately, Boeing today projected strong demand for jetliner financing to fund airlines' appetite for new planes, the Journal noted.
The aerospace giant projects demand for $124 billion in jetliner financing next year as airlines need to fund more than 1,300 aircraft deliveries planned for 2015, the Journal said, adding, the company expects that to grow through the decade, reaching $156 billion in 2019.
About 6.48 million shares changed hands by 4:29 p.m. in New York, compared to the average of 3.65 million shares.
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, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BA's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 7.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BOEING CO has improved earnings per share by 23.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($8.35 versus $5.97).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Aerospace & Defense industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $1,158.00 million to $1,362.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Aerospace & Defense industry and the overall market, BOEING CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- In its most recent trading session, BA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
- You can view the full analysis from the report here: BA Ratings Report