- JP Morgan analyst Seth Seifman reiterated an Overweight rating on the shares of Boeing Co (NYSE: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. (NASDAQ: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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