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Spirit AeroSystems (SPR) Upgraded on Robust Performance

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On Oct 5, Zacks Investment Research upgraded Spirit AeroSystems Holdings, Inc. (SPR - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Spirit AeroSystems has been witnessing rising earnings estimates on the back of a strong performance over the last few quarters. The company has delivered positive earnings surprise three times out of the four trailing quarters, with an average beat of 8.17%. This commercial aero structures producer and supplier’s long-term earnings growth rate is pegged at 10.83%.

The Zacks Consensus Estimate for 2016 moved up 0.9% to $4.54 due to one estimate revision during the last 60 days.

The company’s aero structures enjoy robust demand and are widely used by The Boeing Company (BA - Free Report) and Airbus Group (EADSY - Free Report) in their commercial airplanes. Spirit AeroSystem’s backlog at the end of the second quarter of 2016 stood at nearly $47 billion, including orders of approximately 12,500 aircraft by Boeing and Airbus alone.

Moreover, the settlement of a dispute with Airbus will actually allow Spirit AeroSystems to win more orders from the commercial aircraft manufacturer and to strengthen their alliance.

Per the long-term outlook provided in a Boeing report, demand for commercial airplane is going to increase exponentially over the next two decades. We expect the increase in production of new airplanes will necessitate the supply of high-quality aero structures by Spirit AeroSystems.

Meanwhile, Spirit AeroSystems has maintained its revenue forecast for 2016 in the range of $6.6 billion to $6.7 billion. However, free cash flow is now expected in the range of $350–$400 million, up from the prior expectation of $325–$375 million.

SPIRIT AEROSYS Price and Consensus

 

SPIRIT AEROSYS Price and Consensus | SPIRIT AEROSYS Quote

Another Stock to Consider

Apart from Spirit AeroSystems Holdings, AAR Corp. (AIR - Free Report) is another favorably placed stock in the same industry. AAR Corp. also sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

AAR Corp.'s fiscal 2017 earnings estimates moved up by 4.9% in the last 60 days.

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