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On Tuesday, Bernstein analysts maintained a "Market Perform" rating for Boeing (NYSE:BA) stock, with a steady price target of $179.00. According to InvestingPro data, Boeing’s stock has shown strong momentum with an 11.96% return over the past week, though analyst targets range widely from $113 to $250 per share. Based on InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels. The focus was on Boeing’s significant contract win, which the analysts believe is crucial for the company. They noted Boeing’s substantial investment in its St. Louis facility, exceeding $500 million over the past year, which was likely in preparation for the Next (LON:NXT) Generation Air Dominance (NGAD) program. This win is expected to energize Boeing’s wider engineering workforce. With a market capitalization of $137.9 billion and analysts forecasting 27% revenue growth for FY2025, this contract could be pivotal for the company’s recovery.
The analysts contrasted Boeing’s success with Lockheed Martin ’s (NYSE: NYSE:LMT) situation, calling it a clear disappointment for the latter. However, the extent of Lockheed Martin’s investments in relation to this development was not specified. The analysts suggested that the positive implications for Boeing are more substantial than the negative ones for Lockheed Martin, considering Lockheed’s diverse defense portfolio. Want deeper insights? InvestingPro subscribers have access to over 30 additional key metrics and analysis tools for both companies, including comprehensive Pro Research Reports that transform complex Wall Street data into actionable intelligence.
The report also touched on concerns regarding the F-35 program, clarifying that the NGAD is not a replacement for the F-35, but budget constraints could potentially lead to reduced domestic volumes for the F-35, similar to what occurred during the first term of the Trump administration.
Bernstein’s stance on Boeing reflects the company’s current position and potential growth opportunities following the NGAD program’s progress. The analysts highlighted the strategic importance of the NGAD for Boeing and the potential effects on the defense sector’s budget allocations, particularly in relation to the F-35 program. Boeing’s stock rating and price target remain unchanged, as the company continues to navigate the competitive landscape of the aerospace and defense industry.
In other recent news, Boeing has finalized a significant order with Japan Airlines for 17 additional 737-8 aircraft. This move is part of Japan Airlines’ strategy to enhance its domestic network, taking advantage of the model’s fuel efficiency and operational flexibility. Meanwhile, China’s Commerce Minister, Wang Wentao, has encouraged Boeing to strengthen its collaboration with China’s aviation industry, emphasizing the company’s role in global aviation stability. In legal developments, Boeing is seeking to withdraw its guilty plea in a criminal case related to the 737 MAX, aiming for more lenient treatment from the Justice Department.
On the financial front, RBC Capital Markets has maintained its Outperform rating on Boeing, setting a price target of $200, highlighting improved free cash flow and a favorable production outlook. Melius Research has upgraded Boeing’s stock rating from Hold to Buy, with a new price target of $204, citing effective leadership and a significant contract win in the Air Force’s Next Generation Air Dominance program. The upgrade is also supported by Boeing’s rapid increase in 737 deliveries, surpassing previous estimates. These recent developments underscore Boeing’s strategic maneuvers and ongoing challenges in both the commercial and defense sectors.
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