Boeing
stock got a boost early Monday as one analyst moved off the sidelines and recommended shares. Increasing commercial-jet deliveries was a big reason.
Deutsche Bank analyst Scott Deuschle upgraded
Boeing
stock (ticker: BA) to Buy from Hold. His price target went to $270 from $204, and the new target is about 30% above recent trading levels.
Aircraft deliveries are growing and better deliveries mean better earnings and free cash flow, wrote the analyst. Boeing delivered 480 jets in 2022. Deliveries this year are expected to be about 520 units. Deliveries in 2024, 2025, and 2026 are expected to be about 700, 800, and 820, respectively.
In coming years, commercial-jet deliveries are finally expected to eclipse the prior peak of 806 units delivered in 2018, before Covid-19 and before the 737 MAX was grounded worldwide from March 2019 to November 2020 following two deadly crashes. Both crashes were tied to flight-control software that didn’t act as expected.
Boeing stock was up 5% in midday trading Monday at $218.53 following the ratings hike, while the
S&P 500
and
Dow Jones Industrial Average
were up 0.7% and 0.4%, respectively.
The latest rise pushes Boeing stock’s performance to a gain of 17% so far in November, according to Dow Jones Market Data. Shares are up eight of the past nine days.
With the new rating, about 76% of analysts rate Boeing shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target on Boeing stock is about $243.
Deuschle launched coverage of Boeing in September with a Hold rating and a $204 price target. He came to Deutsche from Credit Suisse, where he had a Hold rating on Boeing stock earlier in the year.
Deuschle’s change signals what’s been happening on the Street lately. Boeing’s coming back in favor. In September, about 59% of analysts covering Boeing rated shares at Buy. The stock has picked up six Buy ratings in recent weeks, according to FactSet.
The average price target in September was actually a little higher at $256.
Three years ago, closer to the 737 MAX grounding and the worst impacts of Covid-19, only 43% of analysts rated shares at Buy. The average price target back then was about $228.
Coming into Monday trading, Boeing stock was up about 9% year to date, and up about 20% over the past 12 months.
Write to Al Root at [email protected]
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