JP Morgan Thinks Boeing Is Riding The Momentum

JP Morgan analyst Seth Seifman reiterated an Overweight rating on the shares of Boeing Co BA and raised the price target from $200 to $207.
BA is up 70% since the start of Q4 versus 10% for the market. The first nine months were tough, however, so for all of 2022, BA returned -6% versus -19% for the S&P 500, noted the analyst.
The analyst attributes the Q4 rally to a well-orchestrated Investor Day in early November and strong Q4 deliveries that should lead to strong cash flow in the period when BA reports on January 25.
The extensions Congress granted for MAX 7 and 10 cockpit certification and large orders from United Airlines Holdings, Inc. UAL and Air India have also helped BA in recent months, along with a general improvement in risk sentiment, said the analyst.
Q4 deliveries leave Boeing well-positioned to meet or exceed its 4Q22 Free Cash Flow guide of about $2.5 billion, the analyst cited.
At the higher end of guidance for 70-80 787 deliveries in 2023, Boeing would be delivering an incremental ~50 units y/y, said the analyst.
This, the analyst thinks, might provide $4.5b of incremental cash receipts, partially offset by late delivery penalties and incremental production costs, though low production rates should keep the latter in check.
Also Read: Airbus Beats Boeing's Annual Plane Delivery Tally, Fourth Time In A Row
Price Action: BA shares are trading higher by 0.51% at $207.61 on the last check Wednesday.
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