By: Carter Copeland
Once in 50-year margin expansion (to levels ~50% above prior peaks) remains a central pillar of our bullish stance on BA. Smart product decisions (re-engined airplane offerings rather than clean-sheet designs) are a big driver of this expansion; however, a dramatic amount of progress on the manufacturing productivity/efficiency front is another source of upside. Following a recent trip to Seattle, we were amazed by the ongoing level of progress in BA’s factories and we left concluding the margin/EPS/FCF growth story is far from over. Below are some takeaways and on pages 2-9 we provide several pictures to help give some context on just how meaningful BA’s progress has been to date, and what sorts of changes can be expected to make their way across the enterprise in the future.