On Monday, Barclays (LON:BARC) upgraded Boeing stock from Equalweight to Overweight, lifting the price target to $210 from $190, representing a 24% upside from the current price of $169.90. The upgrade is based on the expectation that Boeing will show sustained positive momentum in production and deliveries throughout 2025.
According to InvestingPro data, analyst targets for the stock range from $85 to $250, with Boeing currently trading significantly below its 52-week high of $250.19.
According to Barclays, while the valuation metrics do not present an overwhelmingly compelling case, the anticipated progress in production, deliveries, and cash flow is expected to propel the stock higher.
The aerospace giant has been under scrutiny for its financial performance and production issues, with InvestingPro analysis indicating a WEAK overall financial health score of 1.29.
While Barclays now sees a route to a normalized capital structure without the need for equity raising, the company's substantial total debt of $57.65 billion and negative free cash flow remain significant challenges. InvestingPro subscribers have access to 8 additional key insights about Boeing's financial position through exclusive ProTips.
The firm also anticipates Boeing will benefit from asset sales within its Boeing Global Services (BGS) division, which will provide additional means for reducing debt.
Barclays views Boeing's guidance for free cash flow (FCF) usage in 2025 as conservative, suggesting that a breakeven FCF is within reach. The guidance for FCF in the years beyond has been reset to a more reasonable trajectory, which aligns closely with Barclays' forecasts.
The new CEO, Dave Calhoun, who replaced Dennis Muilenburg, is seen as a pivotal figure in driving the necessary cultural changes and rebuilding credibility with key stakeholders, including the Federal Aviation Administration (FAA) and airline customers.
The recent strike by the International Association of Machinists and Aerospace Workers (IAM) is also mentioned as a potential positive development. The time off from production due to the strike is viewed as an opportunity for Boeing to make necessary improvements to the 737 MAX production system and workforce training, which might not have been possible otherwise.
As a prominent player in the Aerospace & Defense industry, Boeing's revenue stands at $73.29 billion for the last twelve months, though InvestingPro's comprehensive Research Report, available for 1,400+ US stocks, reveals deeper insights into the company's operational challenges and market position. Barclays suggests that this enforced pause could ultimately benefit Boeing's operational efficiency and product quality.
In other recent news, Boeing Co (NYSE:BA). is currently negotiating a new deal with US prosecutors to resolve a criminal case related to two fatal 737 MAX crashes. This development comes after a federal judge dismissed an earlier proposal due to the inclusion of race as a criterion for choosing a compliance monitor.
In parallel, South Korea has initiated an inspection of all 737-800 aircraft following a fatal crash involving this model, and a comprehensive investigation into the crash is underway with a focus on a potential bird strike and an unusual landing gear failure.
Meanwhile, Boeing has received a significant order from Pegasus Airlines, Turkey's premier low-cost carrier, for 100 of the 737 MAX 10 models, with options for an additional 100 planes. This order surpasses the size of Pegasus's existing fleet and signals confidence in Boeing's 737 MAX series.
In the world of financial analysis, renowned aerospace analyst Cai von Rumohr has announced his retirement from TD Cowen after covering the Aerospace and Defense industry for over 50 years. His coverage responsibilities will be taken over by Gautam Khanna and Jack Ayers. These are some of the recent developments involving Boeing Co.
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