Deutsche Bank Raises PT on Boeing (BA), Comments on Margin Improvement

Deutsche Bank today reiterated a Buy on Boeing (NYSE: BA) and raised its price target to $90.00 (from $88.00). Analyst said they expect concerns over the 787 grounding to abate over the next several months, and see margin expanding going forward.

In Boeing's recent 10k, the company said margin could expand to 20 percent by 2020. Additionally, Boeing said an extension of every 120 aircraft would drive 787 program margins up 200-250bps. Analysts think this might be an oversimplification, but they are positive on prospects for margin expansion and free cash flow.

"Assuming a few extensions to the accounting quantity on orders/rate increases, program margins could reach 8-9% in the next 4-5 yrs from 1-2% currently. The analysis also suggests a strong cash growth post-2015 with BA FCF/share potential at $15/sh in 2017," said analyst Myles Walton.

For an analyst ratings summary and ratings history on Boeing (NYSE: BA) click here. For more ratings news on Boeing click here.

Shares of Boeing closed at $79.08 yesterday.

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