This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEC0K08U_M.jpgThe analysts told investors that they are raising the rating for the company’s shares based on enhanced cash flow prospects.
“SPR indicates ‘investments’ in Q4 have stabilized the 737 line, which is now ‘cycling’ at 42/month but producing at 38/month, with buffer days to reduce costly traveled work,” the analysts wrote. Stabilizing production should improve productivity, according to TD Cowen.
“Coupled with an expected Airbus price negotiation and big inventory turn opportunity, these suggest a robust FCF rebound,” the analysts added. “Assuming SPR reaches a pricing settlement with Airbus, we expect it will allow SPR to reduce its sizable A220/A350 loss reserve.”
Overall, TD Cowen believes cash should start to build in the second half of the year, thanks to ramping cash and EBIT as volume and productivity increase, a likely Airbus settlement, lower capex in 2025 to 2026, and the substantial room to improve inventory turns.