Jefferies Upgrades Boeing to Buy Amid Spirit AeroSystems Acquisition

• Jefferies upgrades Boeing to Buy, highlighting the long-term benefits despite potential EPS dilution in 2026.
• Boeing announces a strategic acquisition of Spirit AeroSystems for $4.7 billion to enhance supply chain management and operational efficiency.
• The acquisition aims to address manufacturing defects and is seen as a pivotal step for Boeing in the aerospace industry.

On Monday, July 1, 2024, Jefferies updated its stance on Boeing (NYSE:BA), changing the grade to Buy while recommending holding. At the time of this update, the price of Boeing was $182.01. Jefferies highlighted that although the Boeing deal might dilute earnings per share (EPS) for 2026, the benefits it brings are considered 'priceless.' This analysis was published by The Fly.

Boeing, a leading aerospace company, has announced a significant move to reacquire Spirit AeroSystems (SPR) for $4.7 billion. This strategic acquisition is aimed at bolstering its supply chain management, marking a pivotal step for Boeing as it seeks to enhance its operational efficiency and reliability. The deal, disclosed on Monday, is a long-awaited step by Boeing to strengthen its position in the aerospace industry.

The acquisition of Spirit AeroSystems, a prominent fuselage maker, for $37.25 per share in an all-stock transaction valued at $4.7 billion is a strategic expansion for Boeing. This move is aimed at reintegrating Spirit AeroSystems back into Boeing and addressing and rectifying manufacturing defects that have plagued its operations. The acquisition is seen as a strategic effort by Boeing to enhance its operational efficiency and reliability in the aerospace sector.

At the time of the announcement, Boeing's stock price stood at $182.01, experiencing a slight decrease of $0.5 or -0.274%. Throughout the trading day, the stock fluctuated between a low of $180.65 and a high of $184.435, reflecting the market's initial reaction to the news of the acquisition. Over the past year, Boeing's shares have ranged from a low of $159.7 to a high of $267.54, with a market capitalization of approximately $111.73 billion and a trading volume of about 5.9 million shares.

Jefferies' upgrade of Boeing to Buy, despite the potential dilution of EPS for 2026 due to the acquisition, underscores the long-term strategic benefits of the deal. The acquisition of Spirit AeroSystems is considered 'priceless' by Jefferies, highlighting the significant positive impact it is expected to have on Boeing's supply chain management and overall operational efficiency. This strategic move by Boeing is seen as a key step in enhancing its competitiveness and reliability in the aerospace industry.