Spirit AeroSystems raised at Wolfe Research on positive set-up

Analysts at Wolfe Research upgraded shares of Spirit AeroSystems (NYSE:) to Outperform from Peer Perform in a note Thursday, assigning the stock a $34 price target.

They told investors that they are raising the stock following “a cascade of derisking” that should set the stock up to work on the expected production upcycle.

“Over the last month SPR has 1) signed a favorable MOA with Boeing (NYSE:), 2) reported 3Q results where they derisked ’23 FCF and provided an update on op perf, 3) announced a $400M+ potential cash raise to build a cash buffer, and 4) announced a refinancing of their $1.2B ’25 debt, ” the analysts said.

“When we combine these with improving 737MAX delivery trends, our bullish fleet intentions survey, encouraging commentary from Airbus on contract negotiations, benign 2024 consensus FCF ests and the current share price, we see a positive setup which supports our upgrade.”

The analysts also noted that SPR “will be keyed to the 737” and that fast-rising deliveries through YE23 “will bolster confidence” for production into 2024.

In addition, they stated that their firm’s just published Fleet Intentions report further supports the strong demand backdrop that remains supply-side constrained.

SPR shares have rallied more than 7% so far on Thursday.