Boeing upside driven by re-rating - BofA

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By Sam Boughedda

BofA analysts raised the firm's price target to $190 from $165 for Boeing (NYSE:BA) shares on Wednesday, maintaining a Neutral rating on the stock, telling investors that there has been a "significant re-rating" since the company's investor day.

"Since the investor day in early November, Boeing (ticker: BA) stock price has appreciated 21%. All this upside is driven by re-rating, as consensus EPS estimates came down 17% for 2023e and 1% for 2024e and FCF estimates by 17% and 9%, respectively. The Investor Day was a pleasant surprise," wrote BofA.

The analysts were positive about the fact that Boeing's management has acknowledged the challenges it has put to rest and the challenges that may lie ahead for the company.

"The company points out that the most acute of its challenges may be behind it, and the market chose to believe them. We are increasing our PO to $190 from $165 mainly to reflect more positive sentiment on Commercial Aero (including a reportedly potential 100 787 planes order from United and 737-7/-10 expected to ultimately get the Congress approval)," the analysts added.

"However, we reiterate our Neutral rating as we think there are some execution challenges ahead, including turning defense programs profitable, winning more defense contracts, ramping up 737 production & deliveries, and burning 787 excess inventories down."

Boeing shares are down 1.4% at the time of writing on Wednesday.