By Boeing’s impressive performance on Wall Street continues to gain momentum as it receives yet another Buy rating from analysts. Despite concerns about the economy, the aviation industry appears to be operating within its own mini-economic cycle, according to Stifel analyst Bert Subin.
Subin initiated coverage of Boeing stock with a Buy rating and set a price target of $265, representing a potential increase of 14% from current levels. One of the key points highlighted by the analyst is the company’s resilience in the face of potential economic downturns, citing capacity growth and an anticipated production reboot.
While the economy experiences a slowdown, manufacturers of large equipment like Boeing may face challenges. However, aircraft production has been hindered by supply chain issues and the impact of Covid-19. Subin believes that these factors, combined with strong travel demand, contribute to a positive outlook for Boeing’s future performance.
Boeing plans to deliver approximately 480 planes in 2023, compared to over 800 in 2019. The company expects deliveries to increase in 2024 and 2025, surpassing the 800 level once again in 2026.
Following this optimistic assessment, Boeing stock experienced a modest increase of about 0.2% in premarket trading, reaching $232.15 per share. In contrast, S&P 500 futures declined by 0.2%, while Dow Jones Industrial Average futures remained steady.
Although the market response to the Buy rating was relatively minor, it is worth noting that Boeing shares have surged by approximately 32% over the past year.
This positive sentiment surrounding Boeing has been building for some time now. Recently, RBC analyst Ken Herbert also upgraded Boeing stock from Hold to Buy, raising the price target to $275 per share from $200.
According to FactSet, around 80% of analysts covering Boeing stock now recommend buying shares. This is a significant increase from September when only 59% of analysts held a Buy rating for the company.
Comparatively, the average Buy-rating ratio for stocks in the S&P 500 stands at approximately 55%.
The average price target for Boeing shares is around $249 per share, slightly lower than the previous average target of $256 per share in September. This may seem contradictory, but it is important to consider that Boeing’s stock price experienced fluctuations between $220 and $180 from September to October.
In conclusion, Boeing’s exceptional performance on Wall Street remains steady as it garners yet another Buy rating. Analysts remain optimistic about the company’s future prospects, even amidst economic uncertainties. With continued capacity growth and anticipated production improvements, Boeing is poised to emerge stronger than ever.
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