Boeing Wins Fourth Contract With Singapore Air Force; Shares Down 33% YTD

Boeing announced that the Republic of Singapore Air Force (RSAF) awarded the aerospace company with a fourth Performance-Based Logistics (PBL) contract to support the country’s fleet of F-15SG aircraft.

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As part of the 10-year direct commercial sale contract, Boeing (BA) will closely work with the RSAF towards customized support services for the sustenance of the F-15SG. Additionally, the planemaker’s field service representatives will continue to provide on-site technical support.

“This tailored, performance-based solution, coupled with Boeing’s platform expertise, helps our Singapore customer to optimize the full capability of their fleet,” said Boeing director Andy Vest, .

The stock price has lost 33% year-to-date and is trading at a discount of 37% to its 52-week high. (See BA stock analysis on TipRanks)

Last week, Morgan Stanley analyst Kristine Liwag reiterated a Sell rating on the stock with a price target of $165 (25% downside potential).

Liwag expects Boeing to launch an equity issue of between $20 billion and $30 billion leading to a 15-20% dilution following the company’s CFO Greg Smith’s comment on Dec. 4, “we’ll look for every opportunity to [get this debt balance down] in the most efficient way, including equity.”

According to Liwag, Boeing faces multiple headwinds including an unpaid debt burden of $61 billion, operating risks connected to the 737 MAX, weak demand for new aircraft, competition from Airbus, and the likely launch of a new aircraft.

“In our view, without an equity raise, the company’s debt burden would limit the company’s strategic moves in order to protect its market share and/or invest for the next capex cycle,” Liwag wrote in a note to investors.

From the rest of the Street, the stock scores a cautiously optimistic Moderate Buy analyst consensus based on 9 Buys, 8 Holds, and 3 Sells. The average price target of $220.65 implies that shares are fully priced at current levels.