UPDATE: Seaport Global Securities Starts Boeing (BA) at Buy; 'Normal' FCF could peak at >$18/shr or higher

(Updated - June 8, 2020 9:14 AM EDT)

(updated to add analyst comments)

Seaport Global Securities analyst Richard Safran initiates coverage on Boeing (NYSE: BA) with a Buy rating and $277 price target.

The analyst commented, "What's not being reflected in the stock is that: 1) BA's 'normal' FCF could peak at >$18/shr or higher; 2) the likelihood BA's P/FCF multiple expands to 15-17x as investors start discounting mid-cycle vs. late cycle currently; and 3) there are risks ahead, however, absent another COVID-19 wave, we think the worst is now being priced in. Our current view on BA represents an improvement versus our view in our May 18th Defense initiation “Buy Defense - a good entry point for an underappreciated growth story.” Furthermore, this constitutes the first time we're bullish on both Aerospace and Defense simultaneously. While our estimates are arguably conservative relative to Street consensus, the basis for our bullish view is that we think we're now in late cycle and as aircraft orders grow, we move into early cycle and start discounting mid-cycle - where multiples expand to 15-17x from 9x currently. We see risks ahead, but also think most of the bad news is already priced in, and we have conviction BA is an attractive investment."

For an analyst ratings summary and ratings history on Boeing click here. For more ratings news on Boeing click here.

Shares of Boeing closed at $215.83 yesterday.

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