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On Monday, BofA Securities analysts upgraded Boeing stock (NYSE: NYSE:BA) from Neutral to Buy, raising the price target to $260 from $185. The upgrade comes as Boeing’s stock has shown strong momentum, gaining over 32% in the past six months and currently trading near its 52-week high of $212.28. According to InvestingPro data, the stock appears overvalued at current levels, with 11 analysts recently revising their earnings expectations downward.
The analysts noted that Boeing’s aircraft have been involved in significant trade deals with the UK, Qatar, UAE, and China. These agreements include orders for 32 aircraft in the UK, 210 in Qatar, 28 in the UAE, and the lifting of a ban on Boeing aircraft in China. Analysts believe these deals could set a precedent for future global trade negotiations that benefit Boeing, though InvestingPro analysis indicates the company faces profitability challenges with negative earnings over the last twelve months.
Despite Boeing’s backlog not being a critical factor in their valuation, analysts see improvements in production stability and efforts to alleviate free cash flow burn as positive developments. Additionally, Boeing’s renewed focus across its portfolio supports the upgrade to a Buy rating.
The analysts expressed optimism about Boeing’s status as a favored trade mechanism, which they believe creates a buying opportunity. The new price target of $260 implies a free cash flow of $9 per share.
The upgrade reflects the analysts’ belief in Boeing’s potential for growth and stability, given its strategic role in international trade and ongoing operational improvements.
In other recent news, Boeing has been in the spotlight with several key developments. UBS analyst Gavin Parsons (NYSE:PSN) confirmed a Buy rating on Boeing stock with a price target of $226, citing progress on the MAX aircraft production. Boeing is nearing its goal of producing 38 units per month and is seeking FAA approval to increase this to 42 units, with potential future expansion to 47 units. Benchmark also maintained a Buy rating with a $215 target, highlighting Boeing’s production plans as a positive for cash flow and the supply chain. Meanwhile, William Blair reiterated an Outperform rating, noting advancements in Boeing’s space division, particularly the FOO Fighter satellite constellation, which aligns with defense projects.
Additionally, U.S. Senators Elizabeth Warren and Richard Blumenthal urged the Justice Department to prosecute Boeing over two fatal 737 MAX crashes, emphasizing the need for accountability. Boeing plans to maintain its 737 MAX production at 38 planes monthly, as confirmed by Doug Ackerman, Vice President of Quality for Commercial Airplanes. The company is under pressure to boost production following a significant financial loss in the previous year. Boeing’s CEO, Kelly Ortberg, stated that sustaining production at this level is crucial before requesting the FAA to lift current production caps.
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