Wide-moat Boeing reported a difficult first quarter as the firm weathers two concurrent challenges, but we’re maintaining our fair value estimate for the firm.
We are reducing our fair value for Southwest Airlines as we incorporate a somewhat more bearish 2020 into our forecast.
Overall, while we agree that near-term headwinds are fierce, we continue think that there are long-term tailwinds for the firm.
We are reassessing our key valuation assumptions for United, Southwest, Delta, American, and Air Canada in the wake of the coronavirus outbreak.
The wide-moat firm continues to deal with the grounding of the 737 MAX, and we're slightly lowering our fair value estimate.
We view Boeing’s updated return to service estimate of mid-2020 as reasonable, assuming no as-of-yet unknown problems are discovered.
As this change in leadership does not affect our free cash flow assumptions, we are maintaining our $349 fair value estimate.
We still believe the company’s wide moat offers structural protection, though.