Boeing has been able to “navigate the turbulence,” according to Bank of America — which says the worst is now behind the company. Analyst Ronald Epstein upgraded the aerospace giant to buy from neutral. He also raised his price target to $300 from $225, implying almost 29% upside from Wednesday’s close. Passenger demand has been lifted to near pre-pandemic levels thanks to the post-Covid recovery, analyst Epstein wrote in a Thursday note. He added that demand on the defense side has also accelerated domestically and internationally with investment outlays reaching new peaks. “Boeing is participating in the commercial aerospace recovery, as part of the global duopoly in large commercial aircraft manufacturing, with some company-specific challenges. … We expect aircraft deliveries to return to pre-Covid levels by the mid-2020s which in turn should drive cash flow generation and the stock higher,” said Epstein. Even if Boeing is not able to grow its share in the narrow-body aircraft market beyond its current levels of near 40%, the demand is “strong enough” for Boeing to grow further, Epstein added. The analyst noted that Boeing recently increased its production rates for its 737 and 787 models. Epstein said tailwind from higher delivery rates can help the company also offset its lower profitability rates from its defense segment. The company’s defense and space businesses reported $527 million in losses last quarter. “Additionally, we believe the 787 will remain the widebody of choice, holding onto the lion’s share of the widebody market vs. its competitors,” said Epstein. Shares traded 0.8% higher Thursday before the bell, after gaining 8.7% during Wednesday’s trading session on second-quarter results that showed an increase in commercial aircraft deliveries. —CNBC’s Michael Bloom contributed to this report.
