Facing various challenges including the Russia-Ukraine conflict, fewer orders, increased labor costs, and supply chain disruptions, Spirit AeroSystems Holdings (NYSE: NYSE:SPR) anticipates a larger net loss for 2023 along with another annual decrease in its stock value. However, a recent agreement with Boeing (NYSE:BA) has sparked some optimism for the future of the company.
On Monday, Spirit AeroSystems announced a deal with Boeing that involves an immediate payment of $100 million to boost production of 737 and 787 aircraft. This agreement is expected to generate an incremental revenue of $455 million for Spirit through 2025. Despite this, the company anticipates a revenue reduction of $265 million from 2026 to 2033.
Following the announcement of this deal, Spirit's stock experienced a surge of 23%, bringing its value to $21.16.
In order to recover financially, Spirit needs to improve its operations and relationships with Boeing and Airbus. The company also needs to sustain revenue growth while reducing costs and decreasing its current debt balance of $3.9 billion.
Patrick Shanahan, who was recently appointed as Interim President & CEO of Spirit AeroSystems, will lead his first earnings call on November 1st. Analysts are predicting a year-over-year revenue rise of 17% and a net loss per share of $1.35.
The financial sector has given mixed reactions to the Spirit-Boeing agreement. TD Cowen pointed out that long-term execution risks could outweigh short-term gains while Deutsche Bank upgraded Spirit to a buy status with a price target of $30.00. J.P. Morgan remained positive due to the CEO transition and future growth prospects.
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