Boeing Stock Gets Another Upgrade. Why It Can Rise 30%.

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 between March 2019 and November 2020 following two deadly crashes. Both crashes were tied to flight control software that didn’t act as expected.

Boeing stock was up 1.7% in premarket trading at $211.48 a share following the ratings hike, while
S&P 500
and
Dow Jones Industrial Average
futures were both flat.

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 is about $243 a share.

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 also rated Boeing shares Hold earlier in the year.

Deuschle’s change signals what’s been happening on the Street lately. Boeing’s popularity has turned around. In September, about 59% of analysts covering Boeing stock rated shares Buy. Shares have picked up six Buy ratings in recent weeks, according to FactSet.

The average price target in September was actually a little higher at $256 a share.

Three years ago, closer to the 737 MAX grounding and the worst impacts of Covid-19, only 43% of analysts rated shares Buy. The average price target back then was about $228 a share.

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]