Boeing Earnings: Paying for Mistakes Made Long Ago, Taking Back the Factory Floor; Fair Value Up 1%

Discussing first-quarter results released April 24, CEO David Calhoun described Boeing asserting control over its manufacturing discipline, prodded in part by the Federal Aviation Administration's late May deadline to publish a safe manufacturing plan. Losses in the quarter reflected necessary slowdowns in the 737 factory, but we believe Boeing can meet our 2024 forecast if it gets the plant rolling and delivers existing jets in the back half. We increased our fair value estimate by $2 per share to $221, mostly for time value of money, offset by the pending acquisition of Spirit AeroSystems and tapering our long-term forecast of 767 deliveries, now only built as a freighter or tanker.