Spirit AeroSystems upgraded to Outperform by Wolfe, unveils strategic financial moves

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Spirit AeroSystems upgraded to Outperform by Wolfe, unveils strategic financial moves
Credit: © Reuters.

Spirit AeroSystems (NYSE: SPR ) saw its stock surge Thursday after Wolfe Research analysts upgraded the company's rating to "Outperform" and set a new target price of $34 per share. The upgrade reflects Walton's confidence in the company's performance and suggests a potential 47.4% upside from Wednesday's close.

The analysts cited Spirit's financial strategies and robust demand for Boeing's (NYSE:NYSE: BA ) 737 Max jets as reasons for the upgrade. They noted improved Max deliveries as a strength for the company. As part of its financial maneuvers, Spirit raised $400 million through stock and convertible debt sales and refinanced $1.2 billion in long-term debt, extending its maturity from 2025 to 2030.

In addition to these moves, Spirit announced a private offering of 3.250% Exchangeable Senior Notes due 2028 today as part of its strategic capital management strategy. The company expects this move to yield net proceeds of approximately $194.5 million.

Spirit also renegotiated its contract with Boeing to address inflationary pressures and other costs, a move that mirrors its negotiations with Airbus (OTCPK:EADSY (OTC: EADSY )) (OTCPK:EADSF (OTC: EADSF )).

However, Wolfe Research's new valuation method for Spirit involved applying an 8 times multiple of the estimated EBITDA of $887 million for 2025. The research firm also pointed out potential production quality issues as risks that could impact the company.

The developments at Spirit AeroSystems coincided with significant events at Archer Aviation (NYSE: ACHR), Astra Space (NASDAQ: ASTR), and Assertio (NASDAQ: ASRT), which are also influencing investor sentiment and overall market dynamics.

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