Stock market today: S&P 500 hits fresh record close on stronger economic growth
Investing.com -- Boeing is poised to benefit from renewed global trade activity under President Donald Trump, according to Bank of America, which reiterated its Buy rating and raised its price target for the stock to $270 from $260 in a note Thursday.
The bank sees “further orders to come as the Trump Administration continues working through deals globally.”
BofA analysts highlighted that Boeing (NYSE:BA) has emerged as a preferred tool in U.S. trade diplomacy.
“Since the first trade deals in the UK and Middle East, the trend has accelerated,” the note said.
The firm said Boeing’s second-quarter results were among the “cleanest quarters in recent years,” with beats on earnings and free cash flow.
While the stock fell 4% on the day of the results, BofA attributed the decline to tempered expectations on 737 production. The bank stated: “Despite the noise, we appreciate the discipline and see further upside ahead.”
Boeing’s Commercial Airplanes (BCA) division showed steady improvement, with 737 production reaching 38 per month and 787 production increasing to seven per month.
Inventory reduction efforts also yielded results, with 15 737s and five 787s delivered from inventory.
BofA sees a path to lifting the FAA-imposed 737 production cap in the fourth quarter. “While the market seems to have anticipated an accelerated timeline, we still believe the most likely scenario for the rate cap lift will be in the fourth quarter.”
On defense, BofA noted progress with “no negative EAC adjustments in the quarter and positive margins,” but flagged risk from a potential strike by 2,500 Boeing Defense union workers starting August 1.