Boeing (BA) late Wednesday was downgraded to Hold from a previous investment rating of Buy among analysts at Deutsche Bank. They pointed to weaker free cash flow projections through 2027 and limited upside relative to current valuation.
Analysts led by Scott Deuschle said the downgrade reflects a recalibration of Boeing’s (BA) 2025-28 outlook, with free cash flow forecasts reduced to $2.1 billion for 2026, $6.0 billion for 2027 and $11.2 billion for 2028 (marking reductions of 56%, 40%, and 9% respectively from prior estimates).
“Our updated target price offers only 12% upside potential,” Deuschle wrote, noting that the buy-side hurdle rate for new investment in Boeing (BA) stock is closer to 20%.
The analyst attributed the lower cash flow outlook to reduced unit accounting margins, increased advances headwinds extending into 2027, less favorable inventory assumptions and higher capital expenditures. He also anticipates a slower pace of deleveraging and higher cash interest costs over the next few years.
While Deuschle praised Boeing’s (BA) leadership for “making the right operational decisions,” particularly in the 737 and 787 programs, he cautioned that “the financial picture remains constrained by the burdens of the past.”
He said he expects margins and working capital trends to improve meaningfully by 2028 as 777X deliveries ramp, pricing solidifies, and supplier cost pressures ease.
Deuschle maintained that Boeing (BA) remains competitively strong against Airbus (OTCPK:EADSF) (OTCPK:EADSY), but argued that “in terms of competing for shareholders, Boeing (BA) is currently at a disadvantage given where revisions trend and the multiple the stock can support.”
He suggested that investors may find better opportunities among Boeing’s (BA) key suppliers, which he said are “benefiting more directly from the same industry tailwinds.”
Boeing shares were trading at $213.58 as of Oct. 29, 2025, within a 52-week range of $136.59 to $237.38, implying roughly 12% potential upside to Deuschle’s revised target of $240 a share. His model assumes a 5% yield on 2028 free cash flow per share of approximately $14, discounted one year at 15%.
Downside risks to the rating include further Boeing Defense, Space & Security charges, certification delays on the 737 Max 7/10 and 777X, additional quality-control issues, union negotiations with the IAM and slower-than-expected global air traffic growth.
Despite the downgrade, Deuschle cited Boeing’s (BA) long-term potential: “There’s a lot of wood to chop to get there,” he said, “We strongly believe that Boeing’s leadership team is making the right operational decisions.”