Boeing stock received a significant boost on Monday as one analyst changed their position and recommended shares in the company. The increase in commercial jet deliveries played a major role in this upgrade.
Deutsche Bank analyst, Scott Deuschle, upgraded Boeing’s stock (ticker: BA) from Hold to Buy. Deuschle also raised the price target to $270 from $204, indicating a potential increase of around 30% compared to recent trading levels.
According to the analyst, improved aircraft deliveries lead to better earnings and free cash flow. In 2022, Boeing delivered a total of 480 jets. This year, deliveries are projected to reach approximately 520 units. Furthermore, deliveries for 2024, 2025, and 2026 are estimated to be around 700, 800, and 820 units respectively.
Notably, commercial jet deliveries are expected to surpass the previous peak of 806 units in 2018. This achievement is anticipated in the coming years, taking into account the grounding of the 737 MAX worldwide between March 2019 and November 2020 following two fatal crashes. These accidents were linked to flight control software malfunctions.
Following the rating upgrade, Boeing stock experienced a premarket trading increase of 1.7%, reaching $211.48 per share. Meanwhile, futures for both the S&P 500 and Dow Jones Industrial Average remained flat.
Boeing Analyst Rating Trends
According to FactSet, approximately 76% of analysts now rate Boeing shares as Buy, which is higher than the average Buy-rating ratio for stocks in the S&P 500 (about 55%). Additionally, the average analyst price target for Boeing shares is $243.
Deuschle’s Perspective
In September, Deuschle initiated coverage of Boeing with a Hold rating and a price target of $204. Prior to joining Deutsche, Deuschle held a similar Hold rating for Boeing shares while working at Credit Suisse earlier in the year.
Deuschle’s change in rating reflects a broader trend in the market. Boeing’s popularity has been on the rise recently, with an increasing number of analysts recommending Buy ratings. In fact, FactSet data shows that six Buy ratings have been issued for Boeing shares in the past few weeks.
Historical Context
Comparing the current rating trends to three years ago, when the 737 MAX grounding and the detrimental effects of Covid-19 were evident, only 43% of analysts rated Boeing shares as Buy. Back then, the average price target was approximately $228 per share.
Performance Overview
As of Monday trading, Boeing stock has shown positive performance, with a year-to-date increase of approximately 9% and a 20% increase over the past 12 months.
In conclusion, the latest analyst rating trends indicate a growing bullish sentiment towards Boeing shares. With an increased number of analysts recommending a Buy rating and a rise in the average price target, the future looks promising for this aerospace company.