What Is Driving The Rally In Spirit Aerosystems Stock?

SectorFinancial Markets
CountryMiddle east

KIEV, UKRAINE - 2018/12/30: In this photo illustration, the Spirit AeroSystems Aircraft ... [+] manufacturing company logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) LightRocket via Getty Images Shares of Spirit Aerosystems (NYSE: SPR) have rallied by over 110% since November 2020 when Pfizer reported a high efficacy rate of its vaccine and the FAA lifted its ban on MAX aircraft. Investor optimism towards the company that manufactures fuselage, propulsion, and wings for Boeing and Airbus drove this rally.

While the shares have more than doubled over the past few months, Trefis believes that subdued air travel demand is likely to remain a challenge for aircraft manufactures as most airlines continue to cut down on capital expenses. Per recent filings, Boeing expects its production rate to remain stalled until 2022, and Spirit Aerosystems SPR generates 79% of its revenues from Boeing. Thus, the likelihood of a further uptick in the stock remains low. Notably, a gradual recovery in SPR’s stock price also looks likely on comparing the trajectory in Spirit Aerosystems’ stock during the current crisis with that during the 2008 ...read more...