Updated Aug 6 at 2:07pm ET.
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Deutsche Bank raised its price target for the stock to $450, up from $442. This reflects a more optimistic view of what the shares are worth based on the company's recent performance. This adjustment follows a quarter where the company raised its full-year profit goals. The new target is about 7 percent higher than the average analyst target of $419, suggesting this firm sees more room for the stock to rise than most of its peers.
Source: Deutsche Bank
The company finished the Farnborough Airshow with commitments for roughly 1,800 engines. The haul was led by a massive agreement with IndiGo for more than 1,000 LEAP engines, which are the newer, more fuel-efficient models used in many narrow-body planes.
These commitments are vital because they feed the company's long-term business model. While selling the engines themselves is important, the real value lies in the 20 to 25 years of maintenance and spare parts revenue that follows each installation. This record level of interest suggests the company's future service revenue stream remains on a very strong path.
Source: GlobeNewsWire
The company successfully flew a hybrid-electric system at altitudes above 30,000 feet in partnership with NASA and Boeing. This is the first time this kind of technology, which uses electricity to assist traditional jet engines, has been proven to work at the high altitudes where commercial planes spend most of their time.
While this won't change the company's profits today, it is a major step in defending its lead in engine technology. As airlines look for ways to burn less fuel and lower their carbon emissions, being the first to prove these next-generation systems work gives the company a head start on winning the next decade of aircraft engine contracts.
Source: Reuters
Wells Fargo raised its price target for the stock to $390, a 20 percent increase from its previous target of $325. The firm kept its neutral rating, suggesting that while the business is performing well, the current stock price already reflects much of that success.
This large adjustment shows that even more cautious analysts are having to account for the company's faster-than-expected growth in engine deliveries and service revenue. It brings the firm's valuation closer to the current market price, though it remains below the average analyst target of $419.
Source: Wells Fargo
The company reported second-quarter earnings of $2.02 per share, beating the $1.86 analysts expected. Revenue rose 24 percent to $12.6 billion, driven by a surge in commercial services as airlines spend more to keep their existing fleets running. Free cash flow, a key measure of the actual cash the business generates after spending on things like factories, grew 43 percent to $3 billion.
Management also raised its full-year profit goals, now expecting to earn between $7.65 and $7.85 per share. The stock fell slightly after the news, which some analysts attributed to concerns that the rapid growth in new orders is starting to slow down. However, the core of the business, servicing its massive existing base of engines, remains exceptionally strong and is producing more cash than it has in years.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts have recently issued a flurry of price target increases following the company's performance at the Farnborough Airshow. Most analysts are bullish, with 24 of 35 rating the stock a buy and an average target price 12% higher.
Management has a perfect record of clearing the bar they set for Wall Street, beating expectations for eight straight quarters while growing revenue by double digits.
| Expectation | |
|---|---|
| EPS | $1.99 |
| Revenue | $12.83B |
Business Wire · Press release · Aug 4
Investors Business Daily · Aug 1
GlobeNewsWire · Press release · Jul 24
PRNewsWire · Press release · Jul 23
Business Wire · Press release · Jul 22
GlobeNewsWire · Press release · Jul 21
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