Cloudy Skies for Boeing; Resuming Coverage at Neutral

6/19 - "We believe that $130+ oil and weakening traffic may cause some of Boeing’s airline customers to take an updated view of their growth plans, or their ability to recapitalize. Coupled with residual 787 risk, we think that Boeing’s multiple will continue to feel some pressure. As a result, we prefer to await tangible progress on 787 and a clearer indication of airline health before becoming more positive."

"Delivery guidance points to peak, or a plateau at least. Boeing has introduced a target of 505 deliveries in 2009, vs. 480 in 2008: the delta consists of the 25 initial 787s (at 0% margin). We think this is a key indicator, since BA has ample backlog to make further rate increases on its core products and to match Airbus, which aims to ramp from 34 single-aisle per month now to 40 by the end of 2009; Boeing is sticking on 31. We applaud the firm’s discipli...