Goldman Sachs Upgrades Boeing To Buy, Raises Price Target

Goldman Sachs has upgraded Boeing Company's BA rating from neutral to buy, CNBC reported Sunday.

What Happened

The bank analysts gave the aircraft maker a new price target of $173, a premium of 82% on its last closing price of $95.01.

The Boeing stock is down nearly 71% year-till-date, and Goldman Sachs believes the shares are nearing the bottom. "Substantial fear" has been priced in, it told CNBC, and the company will recover on "the back of its strong balance sheet and a rebound in air travel demand" after the novel coronavirus (COVID-19) pandemic.

"We think Boeing will remain a going concern...travel by flight will be as popular as ever once COVID-19 is resolved," Goldman Sachs told CNBC. "We therefore think shares of [Boeing] should be procured at the current price that is down 70% YTD, 80% from 2019 [highs.]"

Why It Matters

Boeing has taken a significant impact from the coronavirus outbreak globally, with air travel coming to a near halt.

The Chicago-based company has asked the federal government for a $60 billion bailout of the airline industry.

Boeing also continues to see the impact of the extended grounding of its 737 MAX aircraft since March last year.

Benzinga PreMarket Prep co-host Dennis Dick last Wednesday warned investors against Boeing stock, stating that a government bailout is unlikely to result in a positive outcome for the aircraft maker.

"If they nationalize Boeing, it's not going to be worth $105 per share. Don't be surprised if it's worth $5 or $10 per share. I'm not joking," Dick said.

Price Action

Boeing's shares closed 2.76% lower at $95.01 on Friday. The shares dropped another 0.54% in the after-hours session at $94.50.