CA - Boeing: Free Cash Flow In Focus Ahead Of Earnings Weak Momentum

2024-06-28 01:29:33 ET

Summary

• Aerospace and defense stocks have performed well in the past year but have underperformed in the first half of 2024, dragged down by shares of Boeing.
• Boeing reported mixed quarterly results in April, with concerns over free cash flow and production challenges lingering ahead of July's Q2 report.
• I see the stock in the range of its fair value and outline key price levels to monitor ahead of the upcoming earnings update.

Aerospace and defense stocks have performed well on an absolute basis in the past year. The iShares U.S. Aerospace & Defense ETF ( ITA ) is higher by 18%, but there has been notable underperformance over the first half of 2024. While there are some macro challenges, including a strong dollar, there are also firm-specific bearish catalysts, particularly concerning one of the fund's largest weights. ...

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