United Technologies (UTX) reported its Q3 earnings today before the market opened. UTX’s revenues of $19.5 billion beat the expectation of $19.39 billion.
Daniel Loeb’s Third Point has reduced its stake in United Technologies. As per a regulatory filing, the fund sold 480,000 UTX shares in the second quarter.
It likely won’t be easy for United Technologies and Raytheon to merge their businesses, as President Trump and the Pentagon are concerned about reduced competition.
The merger between United Technologies (UTX) and Raytheon (RTN) is likely to build a broad and complementary portfolio of high-growth aerospace and defense products.
Stocks have fallen significantly this month so far due to a broader market sell-off. The three major US indices—the Dow Jones, NASDAQ, and S&P 500—have lost 14.7%, 15.5%, and 14.8% of their respective value.
In the second quarter, analysts expect Boeing’s (BA) operating income to rise 25.4% YoY (year-over-year) to $2.77 billion from $2.21 billion, and its operating margin to expand 190 basis points to 11.7%.
Boeing (BA) has a forward dividend yield of 2%, which is slightly higher than the average 1.6% forward dividend yield of the aerospace and defense sector peer group.
The analyst consensus indicates SHW’s target price to be at $460.83, implying a return potential of ~15.0% over the closing price of $400.88 as of April 18, 2018.
Dividends Boeing (BA) has been paying dividends consistently for the past 20 years. In 3Q17, the company paid a total of $900 million in dividends, which was ~30% of its free cash flow generated in the quarter. Falling yield At its current market price of $268, Boeing has an indicated dividend yield of 2.1%. The yield has been […]
Increasing leverage Boeing (BA) operates in a capital-intensive industry, which means regular investments. Boeing must invest in R&D (research and development) before its technology becomes obsolete. As competition from players such as Bombardier and Embraer heats up, R&D investment has become imperative. This investment means huge debt. At the end of 3Q17, Boeing’s leverage was ~$10.8 billion. It […]
High yield Despite the positive run-up Boeing (BA) stock has enjoyed in 2017, its current indicated dividend yield is 2.2%. Boeing’s dividend yield is now lower than the Dow Jones Industrial Average dividend yield of 2.7%. Peer Lockheed Martin (LMT) has an indicated dividend yield of 2.4%, United Technologies (UTX) has an indicated dividend yield […]
The Canadian Air Force placed an order for 65 Lockheed Martin (LMT) F-35 fighter jets for $30 billion. The CAF canceled the order and replaced it with 18 Boeing CF-18 aircraft for $5.2 billion.
Current valuation At present, Boeing (BA) has a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11.2x, which is higher than its average multiple since February 2008 of 8.8x. The market is expecting Boeing’s EBITDA to rise 51% in 2017. As shown in the chart above, Boeing has mostly traded above […]
High yield Boeing’s (BA) current indicated dividend yield is 2.7%, following a ~12% run-up after 2Q17. The yield was higher than 3% before this huge gain. Boeing’s dividend yield is higher than the Dow Jones’s dividend yield of 2.7%. Peer Lockheed Martin (LMT) has an indicated dividend yield of 2.5%, United Technologies (UTX) has a […]
Analyst estimates Boeing’s (BA) EBITDA (earnings before interest, tax, depreciation, and amortization) rose 17% YoY (year-over-year), beating analysts’ estimate of a 15% YoY growth. In 2Q17, EBITDA are expected to rise to 2.8 billion, compared with -$41 million in 2Q16. Both 1Q16 and 2Q16 earnings were impacted by one-time charges related to the KC-46 tanker program […]
Deliveries slow down In the first half of 2017, Boeing (BA) delivered 352 aircraft, a ~6.1% reduction from the first half of 2016, when it delivered 375 aircraft. Of those delivered in 2017, 183 aircraft were delivered in the second quarter (compared with 199 aircraft in 2Q16) and 169 aircraft were delivered in the first […]
The Defense Department, Department of Homeland Security, and Department of Veterans Affairs would be the clear winners in Trump’s proposed budget plan.
Of the 25 analysts tracking Boeing (BA) stock, 24% have a “strong buy” recommendation on the stock and 28% tracking the stock have a “buy” recommendation.
After Iran agreed to reduce the scope of its nuclear program, its sanctions were finally lifted on January 16, 2016. Following this, Iran Air announced a deal with Airbus for 118 aircraft worth almost $27 billion at list price.
Boeing’s Iran deal is with Iran Air, a state-owned airline. The deal spans almost ten years, up to 2025. It will also require financing from the United States.
Price movement Johnson Controls (JCI) has a market cap of $41.7 billion. It rose 5.7% to close at $43.94 per share on November 8, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 6.5%, -1.8%, and 40.9%, respectively, on the same day. JCI is trading 1.9% above its 20-day moving average, 2.0% […]
As DB pension plans have substantially higher risks for companies, after 2008, many companies froze their DB pension plans and shifted to DC pension plans.
After clocking 2.2%, 0.86%, and -7.6% sales rises in 1Q16, 2Q16, and 3Q16, respectively, Boeing’s sales for 4Q16 are expected to fall 1.7% to $23.2 billion.
Analyst recommendations Among the ratings listed in Bloomberg, 15 analysts have issued “buy” recommendations on General Dynamics (GD), while five have a “hold” rating. The average 12-month target price on General Dynamics has risen from $165.88 at the beginning of the year to $169.27 on October 19, 2016. Compared to GD’s current market price of $151.42, […]
General Dynamics (GD), a prime military contractor to the Pentagon, is scheduled to release its 3Q16 earnings on October 26. The consensus forecast is for General Dynamics to post adjusted earnings per share of $2.38 for year-over-year growth of 4.4%.
