Boeing (NYSE:BA), a prominent player in the Aerospace and defense industry, saw its annual aircraft delivery forecast revised downwards to 384 planes on Friday due to the discovery of mechanical defects and improperly drilled parts in some aircrafts. This decision has prompted an increase in inspections of more 737 Max 8 planes by both Boeing and Spirit AeroSystems (NYSE:NYSE:SPR). The mechanical issues have had a negative impact on Boeing's financial performance, leading to a reduced Q4 delivery estimate of 98 planes.
According to InvestingPro data, Boeing's market cap stands at 111.92B USD, with a negative P/E ratio of -24.91 reflecting the company's lack of profitability over the last twelve months. The company has been grappling with weak gross profit margins, as indicated by a gross profit margin of 9.11% for LTM2023.Q2. Despite these challenges, Boeing has experienced a revenue growth of 21.18% during the same period, a positive sign for investors.
The full-year free cash flow estimate for the company was also adjusted downwards to $3.5 billion by Deutsche Bank (ETR:DBKGn). The bank's analyst, Scott Deuschle, was responsible for the downgrade in the 2021 plane deliveries forecast. Deuschle maintains a Hold rating on the company with a price target of $204, currently the lowest on the Street. This revision aligns with an InvestingPro Tip that reveals 12 analysts have revised their earnings downwards for the upcoming period.
The downward revision in Boeing's delivery forecast and the subsequent increase in inspections led to a decline in trading for the company on Friday. The company has been trading at a high EBITDA valuation multiple and does not pay a dividend to shareholders, as per InvestingPro Tips. Yet, a Moderate Buy consensus persists among analysts, with an average Boeing (NYSE:BA) price target of $252.75. This suggests potential upsides of 9.9% and 36.5% respectively from Deuschle's price target and the current market price.
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