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11/28/12

11/28/12. Company Description. Sector: Industrials / Industry: Aerospace & Defense 3 Main Divisions: 1. Commercial Airplanes ~ 60% of revenues 2. Defense, Space, and Security ~ 40% of revenues 3. Boeing Capital Corporation < 1% of revenues Geographic Sales Breakdown:

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11/28/12

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  1. 11/28/12

  2. Company Description • Sector: Industrials/ Industry: Aerospace & Defense • 3 Main Divisions: • 1. Commercial Airplanes ~ 60% of revenues • 2. Defense, Space, and Security ~ 40% of revenues • 3. Boeing Capital Corporation < 1% of revenues • Geographic Sales Breakdown: • A. US ~ 50% of revenues • B. Asia (including China) ~ 18% of revenues • C. Europe ~ 14% of revenues • Competitors: • Airbus (subsidiary of European Aeronautic Defense and Space Company) • Lockheed Martin (LMT) • Northrop Grumman (NOC)

  3. Quick Stats • Valuation Statistics: • Trailing Price / Earnings Ratio: 13.05 • Forward Price / Earnings Ratio: 14.56 • 5 Yr Growth Estimate: 11.90% • Prices / Sales Ratio: 0.71 • Price / Book Ratio: 15.66 • Enterprise Value / EBITDA: 7.28 • Balance Sheet • Cash: $11.12B • Debt: $11.19B • Current Price: $74.09 • Market Cap: $55.87B • Enterprise Value: $56.32B • Beta: 1.04 • 52 Week Price Range: $66.82 - $77.83 • Div Yield: 2.40% • Income Statement Statistics: • Revenue (ttm): $78.95B • Quarterly Revenue Growth (YoY): 12.90% • EBITDA (ttm): $7.73B • Profit Margin (ttm): 5.47% • Net Income (ttm): $4.31B

  4. Investment Thesis • Beginning to Ride the Powerful Aerospace Cycle • Recent Earning Have Been Stellar and Stock Still Cheap Because of Over-Heightened Defense Spending Cut Headwinds • Huge Backlog and Solid and Increasing Dividend Makes Boeing a Safe Play

  5. Boeing Regaining Market Share

  6. Boeing’s Impressive Airplane Deliveries

  7. Stellar Earnings Outpacing Estimates

  8. Boeing’s Huge Backlog • Backlog stands at $378 billion including 4,100 unfilled commercial airplane orders • Would take over 7 years to clear this backlog out!

  9. Steadily Increasing Dividend Current Dividend = 2.40%

  10. Industry/Peer Analysis

  11. Risks 1. Expected Defense Cuts in Washington • However… • A. Implemented cost cutting • B. 25% of DSS revenues are international 2. Expenses Tied to Fuel Costs • Huge operating expense ~ 1/3 of total expenses 3. Pension and Health Care Benefits • Currently have ~ $24 billion in accrued liabilities

  12. Conclusion/Price Target • Boeing will continue to blow out earnings, pushing the P/E ratio down, until the stock becomes too cheap that the price will have to go up • 12 month price target of $90, representing a 21% gain

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