Boeing (NYSE:BA) has had a nice run thus far in Q1 2015, with reasonably solid earnings and production on the uptick – however, an annual investor conference on May 12 could shine light on one of Wall Street’s darlings heading into H2 2015.
On the back end of a dividend announcement ($0.63), investors are now bracing for the Annual Investor Conference tomorrow, which is slated to take place shortly after the opening. Earlier this month, the company revealed a potentially catastrophic software bug in its 787 Dreamliner, which is the latest in its string of setbacks, along with battery woes and operational issues with the beleaguered aircraft.
— Boeing 787 News (@Boeing787News) May 4, 2015
In addition, the company does face some minor headwinds, which has managed to cool sentiment in recent weeks. Earlier today, Boeing agreed to pay $90 million to settle a class action suit that had been filed by several unions. The suit disputed whether employees who lost their jobs following the 2005 sale of a Kansas commercial aircraft facility were entitled to retirement benefits.
Heading into the company’s Annual Investor Conference, several questions exist that could potentially clarify the direction of Boeing heading into H2 2015.
1. Regarding the commercial aviation market, has a hesitancy manifested itself with the lengthened backlogs and mixed economic messages?
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Indeed, the low price of oil has helped provide some tailwinds for the aviation industry, coupled with a healthy increase in passenger traffic growth to the tune of 6% YoY. This growth also has exceeded consensus long-term rates for the commercial aviation market as a whole. However, these effects have been pared by industry production rates that appear to be set closer to matching the mid-point in market growth, with orders falling behind shipments.
2. How has Boeing positioned itself in the Space and Defense sector for H2 2015?
The company has touched on the production of a long range StrikeBomber, though investors could be interested in what other avenues Boeing may enter into. There currently exist number of other channels that the manufacturer could touch on, any of which could prove to appease a curious investing base.
3. What are the company’s ambitions in exploiting new technologies moving forward?
Investors are curious if there are any virgin fields in which Boeing can enter into. The company has never been shy about exploring a number of initiatives, including privatized space travel or drone technology.
4. How does Boeing’s brass view its share price valuation?
Analysts on the street are projecting a consensus 2016 (FY16) core earnings per share (EPS) figure of $9.4 for Boeing, along with a 5% premium to the Standard and Poor’s 500 (S&P 500) Price to Earnings (P/E) multiple of 15.5x. Presently, Boeing has a P/E of 18.32, having already raised its dividend from 0.58% to 0.63% in 2015. As a result, any clairvoyance to the above queries could go a long way in alleviating any concerns for investors. Regardless, Boeing has already established itself nicely heading into H2 2015, up 13% YTD, which has outperformed the Dow Jones Industrial Index (DIJA).