This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.
Spirit AeroSystems, Inc. (SPR): Management’s confidence about their operations, and overly pessimistic market expectations for future performance, spell equity upside potential for SPR
SPR is trading at the lower end of valuations since ROA’ recovered in 2014. SPR is projected to see ROA’ stabilize at 11%-13% levels going forward, but markets are expecting ROA’ to collapse to 9% with steady modest growth. However, considering how SPR has improved their operations after getting through their investment cycle for the most recent set of new aircraft, this appears overly pessimistic.