Boeing stock rating upgraded to buy on production outlook

Investing.com - Redburn-Atlantic upgraded Boeing (NYSE:BA) stock rating from neutral to buy on Wednesday, significantly raising its price target to $275.00 from $180.00. Currently trading at $202.58, Boeing’s stock sits above InvestingPro’s Fair Value estimate, with analysts’ targets ranging from $150 to $260.

The research firm cited Boeing’s improving health after years of troubles, noting positive turns in the company’s financials, culture, industrial processes, and strategy. These improvements, combined with production acceleration, formed the basis for Redburn-Atlantic’s more optimistic outlook. Despite the company’s $69.44 billion in revenue, InvestingPro data shows Boeing currently operates with negative gross margins and moderate debt levels.

The upgrade particularly emphasized production potential at Boeing Commercial Aircraft (BCA), with Redburn-Atlantic identifying upside for 737 and 787 deliveries. The firm projects these aircraft could reach production rates of 63 and 14 aircraft per month, respectively.

This production increase could add $1.7 billion in post-tax cash profits compared to current models, representing a 13% potential upside to Redburn-Atlantic’s 2029 cash flow estimates.

The research firm suggested Boeing’s free cash flow could exceed $14 billion by the end of the decade, surpassing the company’s historical peak of $13.6 billion achieved in 2018.

In other recent news, Boeing has secured two defense contracts totaling approximately $71.8 million. The first contract, valued at up to $49.67 million, involves providing sustainment services for the Royal Saudi Air Force’s F-15 fleet, with work to be completed by June 2026. Additionally, Boeing’s El Segundo division received a $22.16 million contract modification for RedLAN support, extending the contract to a total value of $392.03 million. Meanwhile, Boeing has appointed Steve Sullivan, a former Northrop Grumman (NYSE:NOC) executive, to lead its Air Force One program, amid ongoing challenges with the project. The company is also facing scrutiny from the U.S. National Transportation Safety Board (NTSB) regarding a cabin panel blowout on a 737 MAX 9 flight. The NTSB is expected to criticize Boeing’s safety culture during an upcoming hearing. Furthermore, the black box from the recent Air India Boeing 787 crash remains in India for examination, with the investigation supported by the NTSB.

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