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Spirit AeroSystems Holdings Inc Class A SPR

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Spirit AeroSystems Experienced Whiplash From Boeing 787 Production Slowdown in Q3

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

No-moat Spirit AeroSystems reported a difficult third quarter, as the production slowdown on the Boeing 787 aircraft whiplashed throughout the supply chain. Sales of $980 million and loss per share of $1.13 missed FactSet consensus by 3.7% and 46.0%. We’re decreasing our fair value estimate to $44 per share from $45.50 after updating our model with a more bearish forecast for 737 MAX deliveries and accounting for additional 787 difficulties, but these effects are slightly offset by a higher midcycle operating margin assumption as we give management more credit for diversifying the business toward defense and aftermarket activities.

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Company Profile

Business Description

Spirit AeroSystems designs and manufactures aerostructures, particularly fuselages, for commercial and military aircraft. The company was spun out of Boeing in 2005, and the firm is the largest independent supplier of aerostructures. Boeing and Airbus are the firms and its primary customers, Boeing composes roughly 80% of annual revenue and Airbus composes roughly 15% of revenue. The company is highly exposed to Boeing’s 737 program, which generally accounts for about half of the company's revenue.

Contact
3801 South Oliver Street
Wichita, KS, 67210
T +1 316 526-9000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 14,500

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