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JPMorgan unveils its top pick in commercial aerospace: Investors missing a 'sweet spot'

Employees on a platform next to a Boeing 737 MAX 9 jetliner at the company's manufacturing facility in Renton, Washington.
David Ryder | Bloomberg | Getty Images

Wall Street doesn't appreciate Boeing's "production sweet spot," which should carry core earnings per share and free cash flow through 2020, Cowen research said Friday.

Earnings per share will pop more than 10 percent while cash flow per share will ramp to $24 over the next three years, according to analyst Cai von Rumohr, who called the aerospace company a top pick.

"Boeing's results likely will continue to reflect its very favorable production environment, which is yielding stronger than expected 2017 EPS and cash flow," wrote von Rumohr. "Most investors have missed the power of Boeing's favorable production environment, conditions for which are likely to continue unless the economic upturn unravels or interest rates surge."