Tax Cuts May Lift Boeing's, Defense Giants' Earnings By This Much – Investor's Business Daily

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UBS raised profit estimates for Boeing (BA) and other aerospace/defense giants like Lockheed Martin (LMT), United Technologies (UTX) and Raytheon (RTN) Thursday after lawmakers slashed the corporate tax rate.

X In a note, analyst Darryl Genovesi said that tax reform will lower Boeing’s effective tax rate to 18% from 28% and boosted his 2018 EPS estimate to $13.50 from $11.20, noting that production-rate increases on the 737 and 787 will also help. UBS raised Boeing’s price target to 325 from 253 but kept its neutral rating on the stock.

Shares of Boeing, which is scheduled to report fourth-quarter results Jan. 31, rose 2% to 326.57 on the stock market today and have marched 10% higher in five days of consecutive gains.


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Here are other estimates on earnings and the tax rates upon which they’re based:

  • Lockheed Martin: Tax rate drops to 18% from 30%; 2018 EPS outlook raised to $15.10 from $14.15; price target raised to 325 from 315.
  • United Technologies: Tax rate to drop to 22% from 29%; 2018 EPS estimates raised to $7.40 from $6.80; price target boosted to 141 from 135.
  • Raytheon: Tax rate to fall to 19% from 30%; 2018 EPS estimates raised to $9.65 from $8.37; price target raised to 210 from 205.
  • General Dynamics (GD): Tax rate drops to 20% from 30%; 2018 EPS outlook raised to $11.75 from $10.56; price target kept flat at 240.

Shares of Lockheed edged up 0.1% to 331.30, United Tech was flat at 134.89, Raytheon dipped 0.1% to 193.29, and GD rose 0.2% to 205.10.

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