Bernstein raises its price target on this stock with a 'history of momentum'

Bernstein reiterated its outperform rating on Boeing, raising the price target to $249 from $218, implying a 21% upside, citing positive catalysts including the resumption of deliveries to China, a large widebody order from Qatar Airways, and potential for defense business cash generation. While acknowledging past missteps and concerns about 737 deliveries and certification timelines, the firm believes the risk of not owning the stock outweighs existing challenges, given Boeing's current momentum.

Analysis

Bernstein has reiterated its outperform rating on Boeing (BA), increasing its price target to $249 from $218, which suggests a potential 21% upside for the stock, already up 16% year-to-date. Analyst Douglas Harned highlights several positive catalysts supporting this view, including a strong growth outlook, the potential for Boeing's defense business to become a significant cash generator, the recent resumption of aircraft deliveries to China, and a substantial new order from Qatar Airways for up to 210 widebody jets, alongside easing tariff concerns. These developments, reflected in the overall moderately positive sentiment (0.7) and specific BA sentiment (0.8), underpin Bernstein's increased confidence in Boeing's growth trajectory. However, Harned acknowledges risks stemming from Boeing's historical missteps, current concerns over seemingly light May 737 deliveries, and uncertainties surrounding the certification timelines for the 737 Max 7 and Max 10 aircraft. Despite these concerns, Bernstein believes the positive momentum and lined-up positive elements present a greater risk in not owning the stock. This reiteration follows a recent upgrade attributed to progress in 737 Max and 787 production ramps, improved defense segment performance, and a robust cash position. It is noteworthy that the LSEG analyst consensus indicates a more modest 1% potential upside, although 20 out of 29 analysts covering Boeing maintain a strong buy or buy rating.

Key Decisions for Investors

• Investors should consider Bernstein's bullish thesis on Boeing, supported by recent positive developments and strong momentum, while remaining cognizant of execution risks related to 737 deliveries and Max certification timelines.
• Monitor upcoming delivery figures, progress on aircraft certifications, and further developments in the defense sector, as these are key catalysts identified by the analyst that could impact the stock's trajectory.
• Evaluate the significant divergence between Bernstein's $249 price target and the broader analyst consensus, and weigh the 'risk of not owning' against the acknowledged operational uncertainties before adjusting positions in Boeing.