Morgan Stanley Sees Buying Opportunity in Boeing Stock Amid Labor Vote
Morgan Stanley is seeing a buying opportunity in Boeing's stock due to its $715 billion backlog and the company's ability to execute against that demand. The firm has maintained an Equal-weight rating and $250 price target on Boeing, which implies roughly 33% upside from the current share price around $187.
The key factor is the upcoming vote by Boeing's professional and technical engineers, represented by the SPEEA union, on a revised contract offer on October 1. If the contract is ratified, it would lift a major labor overhang from the stock, which has already been facing multiple headwinds this year.
The SPEEA union has only conducted one full strike against Boeing in its history, a 40-day work stoppage in 2000, and most current members have never experienced a strike. Morgan Stanley notes that the IAM machinists' experience of striking seven times between 1948 and 2008 does not directly apply to SPEEA.
The company's stock has been reacting to FAA commentary suggesting a potential delay on 737 MAX 10 certification due to a software issue, which could revise consensus free cash flow estimates lower. However, Morgan Stanley's $10 billion free cash flow anchor remains intact, supporting its price target based on a 20x multiple of normalized 2028 FCF per share.