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Analyst Watch: Boeing's Best Entry Points

Boeing's second quarter profits beat expectations Wednesday morning, with earnings per share of $1.06 versus the $1.01 forecast. So is it time to buy?

Cai von Rumohr, managing director and senior aerospace analyst with Cowen & Co., upgraded Boeing to outperform on March 22 at a price of $70.70. He has meanwhile remained neutral on Lockheed Martin and Northrop Grumman, while placing outperform ratings on L3 Communications Holdings and General Dynamics.

"We’ve hiked 2012-13 estimates for BA’s 737 rate of 35 versus expected 34 per month," he says. "Selling for a 14.2x C11 P/E early in an estimated long upcycle, BA offers 25 percent potential upside relative to the market 12 months."

He sees:

Demand Tone Firming and the 787 On Track For Q4 Delivery.

As such, von Rumohr's "Sweet Spot" Strategy still looks valid, he says.

"BA has outperformed the last four quarters versus and average of 13 quarters in past swings as trailing 12-months orders rose (up in Q1 & Q2)," he says. "While it’s off 2 percent versus S&P 500 so far in Q2, we think it’s unlikely to have broken its upward pattern since it also had 1-2 Q corrections in prior major runs — all good entry points."


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Disclosure: Immediate disclosure information was not available.



The Associated Press contributed to this report.