Like peer and competitor Lockheed Martin
The gravy at Boeing these days comes from defense contracts, a situation shared by other military contract titans such as Northrop Grumman
Though management raised full-year guidance for 2004 based on expected decreases in taxes, most of its previous predictions remained. Longer-term earnings targets of $2.48 for 2005 represent very modest 8% growth over the $2.30 expected this year. That means the firm currently trades at about 22 times this year's earnings, and 19 times the 2005 estimate. That looks a bit rich.
On an enterprise value-to-free cash flow basis, it looks only a tiny bit better, trading at 19 times this year's estimate, and 13 times the predictions for 2005. But predictions are just that, so investors who have seen a decent return against the overall market should ask themselves whether there aren't better places for their money.
For related Foolishness:
- Free cash flow has been better at Lockheed.
- Boeing's not the only slow-growing defense player that looks overpriced.
- Want defense for your portfolio? Consider the smaller companies, including this trio of multibaggers.
Seth Jayson likes flying Boeing, but he can sit out the stock. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here . Fool rules are here .
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