UPDATE: Credit Suisse Downgrades Boeing On Reduced FCF Projections

In a report published Thursday, Credit Suisse analyst Robert Spingarn downgraded the rating on The Boeing Company (NYSE: BA) from Outperform to Neutral, and lowered the price target from $162.00 to $133.00.

In the report, Credit Suisse noted, “Our prior bullish thesis discounted an unprecedented production cycle (driven by robust replacement demand) translating into record FCF in the 2016/2017 timeframe. The slope of FCF improvement was enhanced by an anticipated swing in 787 cash costs from a multi-billion $ headwind to a similarly-sized tailwind. However, progress on the cost improvement seems to have stalled a bit, which was a cause for debate on Wednesday's Q3 earnings call and an associated decline in BA shares.Although the delay is partially due to accelerated inventory acquisition to de-risk production of 787-9 and a future rate boost to 12 per month, underlying cash costs are still not declining at the pace we had modeled, which called for cash break-even on the program at year-end 2014 with no incremental deferred (capitalized cost) in 2015.”

Boeing closed on Wednesday at $121.45.