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Boeing (NYSE:BA) +4.5% in Friday’s trading as Rothschild & Co. Redburn upgraded to Buy from Neutral with a $275 price target, raised from $180, saying that after years of troubles, “things seem to be taking a more positive turn for Boeing and the company appears healthier.”
“Improvements in financials, culture, industrial processes and strategy, combined with production acceleration, should enable a reassessment of the stock in the market,” Redburn analyst Olivier Brochet wrote.
“Our degree of confidence in the recovery has increased in recent months, and we are starting to see a level of upside to existing forecasts that is of greater magnitude than any potential downside,” according to the analyst.
Brochet said additional upside from 737 deliveries, which he forecast at a rate of 63/month, and 787 deliveries, which he estimated at 14/month, could add $1.7B to Boeing’s (NYSE:BA) post-tax profits compared to the analyst’s current model, which the analyst said would lift cash flow estimates in 2029 by 13% and lift the company’s free cash flow above $14B by the end of the decade, vs. Wall Street consensus for $11.7B in free cash flow by 2029.
“It seems Boeing is about to transition to a new phase where it delivers on expectations, and the Street will be looking for upside to them,” the analyst wrote.
Boeing (NYSE:BA) shares also are helped Friday after China said it would approve export applications for rare earth minerals to the U.S., potentially easing a major irritant in trade negotiations between the two countries.