Boeing’s $4.7 billion purchase of Spirit AeroSystems represents “fair value”

Investing.com – Boeing’s (NYSE:) $4.7 billion deal to buy Spirit AeroSystems (NYSE:) represents a fair value for the aircraft parts supplier and is unlikely to be challenged by a higher offer, according to analysts at Barclays.

On Monday, planemaker Boeing agreed to buy back Spirit AeroSystems, which it sold nearly two decades ago. The move comes as Boeing seeks to improve its safety record following a dangerous mid-air fuselage accident earlier this year.

Under the terms of the deal, Boeing would buy back its former subsidiary for approximately $37.25 per share, representing an enterprise value of $8.3 billion including debt.

In a note to clients, Barclays analysts said the amount represents eight times Spirit AeroSystem’s highest core earnings and a free cash flow yield of about 7%, according to their 2026 forecast.

“We (…) do not believe that a higher offer is in sight,” said the Barclays analysts.

They also downgraded their rating on Spirit AeroSystem stock to “equal weight” from “overweight” and stated that they do not expect the company to be profitable or cash flow positive by 2025.

Meanwhile, analysts said Spirit AeroSystem’s separate, binding contract with Airbus will increase the company’s exposure to the European aircraft maker and Boeing rival and “better balance its portfolio.” Airbus will take over core operations at four of Spirit AeroSystem’s factories worldwide.