Positive signals are flashing for Boeing shares, according to Bernstein. “We continue to hear skepticism now that shares are more expensive,” said analyst Douglas Harned, who has an outperform rating on the stock, in a note to clients Tuesday. “But, when we examine Boeing’s current situation alongside twenty years of history, we still see this as an attractive time to buy.” Harned said the aircraft stock has substantially outperformed in three periods over the last two decades: April 2004 to April 2007; December 2012 to April 2015; and June 2016 to February 2019. Each of these periods share common themes: global airline traffic was increasing, the delivery outlook forecasted strong growth and rising free cash flow was on the horizon — but investor sentiment was negative. He sees those same themes now. The 737 Max backlog is seven times the size of the company’s projected 2025 delivery rate, while Harned said estimates for the company’s March deliveries are “strong.” He said a stabilization of engine deliveries should help the company increase the number of planes it can distribute. Further, Boeing said Tuesday it delivered 64 planes to customers in March, the most since December. Boeing stock has a history of following free cash flow specifically, Harned said. While the stock is up since last fall, he said there’s more upside to come. Harned raised his price target to $252 from $240. His new target implies the stock could gain 19.6% from where it ended Monday’s session. The Dow Jones Industrial Average constituent has gained more than 11% since the start of 2023. That year-to-date performance has put the stock ahead of both the Dow and broader S & P 500 , which have advanced about 1.7% and 7%, respectively, in the same period. BA .SPX,.DJI mountain 2003-04-01 Boeing’s past two decades vs. the S & P 500 and Dow “When investors look at Boeing’s stock, it is often darkest before the dawn,” Harned said. “But, once cash flow starts to come, the shares have a history of gathering extraordinary amounts of momentum.” Still, the analyst noted the company is currently facing issues related to its supply chain constraints, ability to win market share and its access to China. Defense issues could also hamper the company’s ability to meet its free cash flow goals in 2025 and 2026, he said. Debt is also an issue, Harned said, though the company should be able to pay down a majority of what it owes over the next three years. — CNBC’s Michael Bloom contributed to this report.
