Investors should take note of the compelling aspect of Spirit Aero’s shares
- Spirit AeroSystems Holdings received an upgrade from Morgan Stanley analyst Kristine Liwag
- Shares of Spirit Aero are down about 65% from April 2019
- Spirit Aero has used over $1 billion since the grounding of the Boeing 737 MAX
- Free cash flow is expected to return in 2024
- About 45% of analysts rate Spirit Aero shares as Buy
- Spirit Aero generates about two-thirds of its annual sales from Boeing
- Boeing helped Spirit Aero by renegotiating some contracts in October
- Spirit stock is trading at 12% of Boeing’s stock price
Shares of Spirit AeroSystems Holdings, a major supplier for Boeing, have experienced a significant decline of about 65% since April 2019. The company has faced numerous challenges, including the grounding of the Boeing 737 MAX and the impact of the Covid-19 pandemic. However, there is some positive news for investors. Morgan Stanley analyst Kristine Liwag recently upgraded Spirit Aero’s shares to Hold from Sell and raised the price target. While it may not be a Buy rating, any upgrade is a relief for the company. Liwag believes that things are as bad as they will get for Spirit Aero and expects free cash flow to return in 2024. This, along with improving demand for air travel, prompted the ratings change. Despite the upgrade, sentiment on Wall Street towards Spirit Aero stock remains lukewarm, with only 45% of analysts rating it as Buy. However, this is an improvement from September when only 30% of analysts had a Buy rating. One positive aspect for the stock is its relative value compared to Boeing. Spirit Aero generates about two-thirds of its annual sales from Boeing, and the two companies are closely tied. Boeing has even renegotiated some contracts to support Spirit Aero. Currently, Spirit Aero’s stock is trading at 12% of Boeing’s stock price, down from about 25% when the MAX was grounded. The average ratio since then is almost 20%, suggesting a potential increase in Spirit Aero’s share price. Overall, the recent gains in both Spirit Aero and Boeing shares indicate a growing optimism in the commercial aerospace industry.
Public Companies: Spirit AeroSystems Holdings (SPR), Boeing (BA)
Private Companies:
Key People: Kristine Liwag (Morgan Stanley analyst)
Factuality Level: 7
Justification: The article provides information about an upgrade of Spirit AeroSystems by Morgan Stanley analyst Kristine Liwag. It also mentions the challenges faced by the company in recent years, such as the grounding of the Boeing 737 MAX and the impact of Covid-19 on air travel. The article includes some data and statistics to support its claims. However, it does not provide a comprehensive analysis of the company or the industry, and it does not include any opposing viewpoints or potential risks. Overall, the article provides some factual information but lacks depth and balance.
Noise Level: 3
Justification: The article provides relevant information about Spirit AeroSystems and its relationship with Boeing. It discusses the company’s recent upgrade and the challenges it has faced. It also mentions the impact of the Boeing 737 MAX grounding and the COVID-19 pandemic on Spirit Aero’s business. The article includes data and charts to support its claims. However, it lacks in-depth analysis and actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Shares of Spirit AeroSystems
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the upgrade of Spirit AeroSystems Holdings by Morgan Stanley analyst Kristine Liwag. It mentions the challenges faced by the company due to the grounding of the Boeing 737 MAX and the impact of COVID-19 on air travel. The upgrade and improving sentiment indicate a positive outlook for the company and the commercial aerospace industry.
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