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Investing.com -- Boeing is entering a new phase of recovery that could support a market reassessment of its stock, according to analysts at Redburn.
In a note titled "Making Boeing (NYSE:BA) Healthy Again," the firm upgraded Boeing to Buy from Neutral and raised its price target to $275 per share, up from $180.
“After years of troubles, things seem to be taking a more positive turn for Boeing and the company appears healthier,” Redburn wrote.
The analysts cited progress in areas including “financials, culture, industrial processes and strategy,” alongside planned increases in aircraft production.
Redburn believes Boeing’s delivery ramp-up, particularly to monthly production rates of 63 for the 737 and 14 for the 787, could add $1.7 billion in post-tax cash profits compared to current forecasts.
That represents “13% potential upside to our 2029E cash flow estimates,” the firm said, and could lift free cash flow beyond $14 billion by the end of the decade, above the $13.6 billion peak in 2018.
Crucially, Redburn noted that this future cash flow would be of “much higher underlying quality,” crediting the company’s “re-focus on safety and quality” and the cultural and strategic reset underway under new CEO Kelly Ortberg.
The analysts acknowledge continued challenges but believe “the path to increased production over the coming 18–24 months creates the conditions for an increasingly favourable market view on the stock.”
Boeing currently trades at 12x price-to-cash flow based on 2029 forecasts, versus 14.5x in 2018. With improved fundamentals, Redburn now sees Boeing as poised to “transition to a new phase where it delivers on expectations,” noting that “the street will be looking for upside to them.”