On Wednesday, Spirit AeroSystems (NYSE:SPR) saw an adjustment in its financial outlook as RBC Capital maintained a Sector Perform rating on the company's stock but increased the shares target to $35 from the previous $33.
The adjustment comes in the wake of the aerospace supplier's reported first-quarter earnings and cash flow usage, which included a loss per share of $3.93 and free cash flow (FCF) usage of $444 million.
Spirit AeroSystems faced a significant reduction in deliveries, with only 44 units of the 737 MAX being shipped, marking a 54% decrease. This downturn is attributed to Boeing (NYSE:NYSE:BA), Spirit's major customer, halting acceptance of traveled work and scaling down production due to quality concerns. Consequently, Spirit AeroSystems has opted not to provide financial guidance for the year 2024.
The company has also revised its production forecasts for Boeing aircraft, with the 737 MAX production expectations now set at 31 per month. Additionally, Spirit AeroSystems has updated its full-year production estimate for the 787 model, now anticipating only 55 deliveries in 2024. This represents a significant decrease from previous expectations.
The ongoing merger discussions between Spirit AeroSystems and Boeing are highlighted as a critical factor for the stock, especially as the company's financial outlook appears to be substantially weakened. Despite these challenges, RBC Capital's analyst notes the decision to maintain the Sector Perform rating while nudging the price target slightly upward to $35.
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