There's been a notable change in appetite for The Boeing Company (NYSE:BA) shares in the week since its quarterly report, with the stock down 11% to US$148. Revenues of US$14b arrived in line with expectations, although statutory losses per share were US$0.79, an impressive 52% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Boeing from 19 analysts is for revenues of US$79.5b in 2021 which, if met, would be a huge 31% increase on its sales over the past 12 months. Boeing is also expected to turn profitable, with statutory earnings of US$4.51 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$81.7b and earnings per share (EPS) of US$6.10 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The analysts made no major changes to their price target of US$184, suggesting the downgrades are not expected to have a long-term impact on Boeing's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Boeing, with the most bullish analyst valuing it at US$264 and the most bearish at US$125 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Boeing is forecast to grow faster in the future than it has in the past, with revenues expected to grow 31%. If achieved, this would be a much better result than the 5.6% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 5.7% next year. Not only are Boeing's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Boeing. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Boeing going out to 2024, and you can see them free on our platform here..
Even so, be aware that Boeing is showing 1 warning sign in our investment analysis , you should know about...
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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