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VIEWS: 12 PAGES: 2

  • pg 1
									INVESTMENT RECOMMENDATION
Industrial Sector: Boeing Company
Student Analyst: Tim Icard

Company Overview from Yahoo! Finance
      The Boeing Company, together with its subsidiaries, engages in the design, development,
manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile
defense, human space flight, and launch systems and services worldwide. It operates in five
segments: Commercial Airplanes, Precision Engagement and Mobility Systems (PE&MS),
Network and Space Systems (N&SS), Support Systems, and Boeing Capital Corporation (BCC).
The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft, as
well as provides related support services principally to the commercial airline industry. This
segment also offers aviation support, aircraft modifications, spares, training, maintenance
documents, and technical advice to commercial customers. The PE&MS segment engages in the
research, development, production, and modification of precision engagement, and mobility
products and services. The N&SS segment researches, develops, produces, and modifies
products and services to assist its customers in transforming their operations through network
integration, intelligence and surveillance systems, communications, architectures, and space
exploration. The Support Systems segment engages in operations, maintenance, training,
upgrades, and logistics support functions for military platforms and operations. The BCC
segment facilitates, arranges, structures, and provides selective financing solutions for the
Commercial Airplanes segment customers. This segment's portfolio consists of equipment under
operating leases, finance leases, notes and other receivables, and investments and assets held for
sale or re-lease. The Boeing Company operates in the United States, Canada, and Australia. The
company was founded in 1916 and is based in Chicago, Illinois.

5 year Stock Performance Relative to the S&P 500 from Yahoo
Social Responsibility
      Global corporate citizenship refers to the work Boeing does in their diverse communities to
improve their world. They know that what they do has a global impact and that their combined
enterprise-wide efforts can yield sustainable improvement in the communities in which they live,
work, and support. Global corporate citizenship is one of Boeing's core values, and their
communities are among the key stakeholders in the company's business model. Corporate
citizenship is as integral to their company as their expertise in flight and technology. The role of
Boeing's Global Corporate Citizenship (GCC) function is to align and integrate the interests,
motivations and resources of their stakeholders, sharing what they know and who they are in
order to convene, collaborate and lead in improving their world. And, they work with their
community partners and fellow grant-makers to measure that improvement, define expected
results and determine the ultimate impact of each of their investments.

Valuation Data from Morningstar and Yahoo! Finance
                                                        HISTORY
              Revenue     g        FCF        g        Dividends g          EPS          g               PE     14.21
2007*         66,387.00   7.9%     7,853.0    35.0%    1.40      16.7%            5.26   85.2%          Beta    0.88
2006          61,530.00   12.2%    5,817.0    6.7%     1.20      20.0%            2.84   -11.0%     Tax Rate    24.0%
2005          54,845.00   4.6%     5,453.0    119.9%   1.00      29.9%            3.19   42.4%    Total Debt    82,200
2004          52,457.00   3.9%     2,480.0    -21.0%   0.77      13.2%            2.24   151.7% Market Equity   57,347
2003          50,485.00   -6.6%    3,140.0    -6.9%    0.68      0.0%             0.89   -69.0%          Wd     58.9%
2002          54,069.00   -7.1%    3,374.0    22.9%    0.68      0.0%             2.87   -15.8%         Wce     41.1%
2001          58,198.00   13.4%    2,746.0    -45.2%   0.68      21.4%            3.41   39.8%           Rrf    3.8%
2000          51,321.00   -11.5%   5,010.0    0.4%     0.56      0.0%             2.44   -2.0%           Rm     12.0%
1999          57,993.00   3.3%     4,988.0    537.0%   0.56      0.0%             2.49   116.5%           Rd    5.4%
1998          56,154.00            783.0               0.56                       1.15           Rs (CAPM)      11.0%
                                                                                                      WACC      7.0%
Avg. Growth               2.2%                72.1%             11.2%                    37.5%   Shares Out.    765

                                                        MODELS
Morningstar FV            Constant Dividend                  Supernormal   FCF                 Supernormal Dividend
$110.00                   Growth 9.5%                           Growth      FCF                   Growth        Div.
                          Rs       11.0%               2008     6.0%        8,324        2008     14.0%         1.60
S&P FV                    Price    $102.20             2009     5.0%        8,740        2009     12.0%         1.79
NA                                                     2010     5.0%        9,177        2010     12.0%         2.00
                                                       2011     4.0%        9,545        2011     10.0%         2.20
Yahoo 1-Yr Target            Constant FCF              2012     3.0%        9,831        2012     10.0%         2.42
$93.21                    Growth 2.0%                  Tg       2.0%        10,027       Tg       9.5%          2.65
                          WACC 7.0%                    WACC     7%                       Rs       11%
Current Price             Price    $101.99             TV       200,549                  TV       177
$74.98                                                 Price    $128.11                  Price    $112.19


Investment Opinion
   Boeing Company stock is now trading at $74.98, while it is valued above $93.00 according to
analysts from Morningstar and Yahoo! Finance. My calculations are in accordance with the
opinions of the analysts in feeling that this stock is undervalued right now. Boeing is below the
S&P right now, but I feel they will rise above it in the future. I recommend that we purchase 45
shares of Boeing stock at the current price.

Sources
Yahoo! Finance: http://finance.yahoo.com/
Morningstar: http://library.morningstar.com/
Boeing Company: http://www.Boeing.com/
Google Finance: http://Finance.Google.com/

								
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