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The stage is set for a big move higher for Boeing as the stars line up in the aircraft maker’s favor, according to Citi. The bank initiated the aerospace and defense stock with a buy rating and a price target of $265. That target signals upside of 32% from Thursday’s close. A broader theme behind Citi’s initiation of Boeing was the bank’s positive stance on the U.S. aerospace and defense sector. BA YTD mountain BA YTD chart “A & D is at the center of a number of megatrends — secular, multi-year growth drivers largely not dependent on the economy. When we model out many of these trends in the years to come, we believe the end game will be the creation of trillions of dollars of market cap across the group,” analyst John Godyn wrote. When it comes to Boeing specifically, the analyst wrote that the company has “encountered a series of major setbacks over recent years” but is in the process of active turning things around. “With new leadership changes focusing on quality and safety with an emphasis of proven stability on a set of six KPIs before pursuing next level production steps, the company’s actions convey a reassuring tone that prevailing quality issues will be addressed,” he added. Other key catalysts that justify Godyn’s bullish stance on Boeing include the company’s massive backlog and order momentum, its path to returning to positive cash flow and a ramp-up in production of the 737 MAX and 787. He also emphasized the broader sector’s return to profitability and a renewed focus on quality controls. Shares of Boeing have added 13% this year, lagging the S & P 500’s 17.3% advance.
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