Boeing (BA) raised to Buy at Deutsche Bank on improved FCF outlook

November 20, 2023 6:14 AM EST
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Price: $233.87 +0.97%

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    26 Buy, 11 Hold, 3 Sell

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Deutsche Bank analyst Scott Deuschle upgraded shares of Boeing (NYSE: BA) to Buy from Hold with a price target bumped to $270 (prior was $204).

The new price target offers about 30% upside compared to Friday’s close.

Shares rose 1.7% in pre-open Monda.

“Our upgrade rationale is simple: aircraft deliveries are accelerating, and we think there's a credible case to be made that this improved performance can be sustained. And if that's correct, then the momentum on deliveries should carry through to a positive inflection in FCF revisions,” Deuschle said in a client note.

Inflections in revision could help shares to meaningfully re-rate higher, the analyst added.

“We remind investors that the last time BA had a major positive inflection point in revisions was in 2017, when FCF revised up 46% and the stock was up 89% for the year.”

The bank is raising its FCF forecasts, positioning them above Street estimates for all forecasted years through 2027.

In the upcoming fourth quarter, Deutsche Bank's FCF estimate is 49% higher than the Street consensus, projecting $2.6 billion compared to the Street's $1.7 billion.

By Senad Karaahmetovic

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