Boeing's Turning Point: Analysts Raise Price Forecasts, Highlighting CEO Change and Anticipated Delivery Growth

Boeing Co BA shares are trading lower today following second quarter earnings miss reported yesterday. Several analysts raised the price target on the stock.

Boeing reported a revenue decline of 15% Y/Y to $16.866 billion, missing the consensus of $17.23 billion, and adjusted loss per share of $(2.90) missed the consensus of $(1.91).

Also, Boeing announced Robert K. “Kelly” Ortberg as the company’s new president and chief executive officer, effective August 8, 2024.

Stifel analyst Bert W. Subin upped the price target from $230 to $235 while maintaining a Buy rating.

The analyst writes that the key announcement is Kelly Ortberg’s appointment as Boeing CEO. Ortberg’s hire could drive much-needed cultural change and mark a new chapter for Boeing, with strong demand and improving supply on the horizon.

Subin doesn’t anticipate an increase in delivery estimates after earnings but doesn’t expect significant cuts either, suggesting a potential turning point.

At the call, CFO Brian West revealed that free cash flow (FCF) will remain negative in the third quarter but is expected to recover in the fourth quarter. As production increases—MAX reaching ~38/month and 787 ~5/month by year-end—inventory should stabilize, with additional aircraft deliveries expected to boost results, writes the analyst.

Read: Boeing Resumes 737 MAX Deliveries To China After Regulatory Delay: Report

RBC Capital Markets analyst Ken Herbert raised the price target from $210 to $220 and reiterated the Outperform rating.

The analyst says that the key upcoming catalysts are Kelly Ortberg’s expected reset of company expectations and the resolution of the IAM contract in September.

Herbert anticipates no strike at Boeing and views the catalyst path as favorable, especially if Boeing achieves its planned delivery increase in H2 2024, which is crucial for improving the FCF outlook.

Goldman Sachs analyst Noah Popona maintained a Buy rating with a price target of $242.

The analyst writes that the press release doesn’t provide 2024 guidance, but they anticipate Boeing will outline its production ramp through the end of the year and reaffirm its $10 billion mid-term framework.

Last month, Boeing agreed to finalize a guilty plea to a criminal fraud conspiracy charge and pay at least $243.6 million for breaching a 2021 agreement with the U.S. Justice Department.

Boeing stock has lost around 25% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Aerospace & Defense ETF ITA and First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF MISL.

Price Action: BA shares are down 6.47% at $178.26 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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