Boeing Soars as Analysts See Cash Flow Recovery
Boeing's stock has been on a rollercoaster ride due to various factors, but analysts at Bernstein SocGen believe it is time to buy. They reiterated their Outperform rating with a $298 price target, which represents a 27% upside from the current price of $234.42.
The key to this bullish thesis lies in Boeing's cash flow recovery, which is expected to reach over $10 billion by 2028. The company has already shown signs of improvement, with Q2 FCF beating both consensus and Bernstein's own estimate by a significant margin.
The certification of the 737 MAX-7 on August 3 was a major catalyst, and the recent SPEEA union deal has moved closer to resolution. Bernstein views the 737 and 787 production rate trends as positive, with margin improvement expected as volumes scale.
However, there are still some challenges ahead. The company's balance sheet is stretched, with debt-to-equity sitting at 8.3x. Additionally, the $4.9 billion 777X non-cash charge looms large.