Boeing Co (NYSE:BA, ETR:BCO) has earned an upgrade from Bank of America to “Buy” from “Neutral,” with analysts citing growing confidence in the aerospace giant’s turnaround under CEO Kelly Ortberg and its emerging role as a favored asset in U.S. trade negotiations.
“Under Kelly’s leadership, we are more confident BA can break the ‘doom loop,’” BofA analysts wrote in a note titled Sisyphus on the path to breaking the 'doom loop.'
The bank also raised its price objective to a Street-high $260. The new price target implies free cash flow (FCF) of $9 per share, up from a prior target of $185.
Analysts highlighted Boeing’s progress in stabilizing production, divesting non-core assets, and refocusing on core operations, all while benefiting from favorable trade dynamics.
“Boeing aircraft have emerged as the favored trade tool for the Trump Administration in recent trade deals,” they wrote, referencing recent orders secured in the UK (32 aircraft), Qatar (210 aircraft), and the UAE (28 aircraft), as well as China’s removal of a ban on Boeing jets.
While the analysts noted Boeing’s backlog has not been the core of their valuation, they emphasized that the combination of operational improvements and geopolitical tailwinds is creating a buying opportunity.
Longer-term competition
The firm also acknowledged the headwinds facing the company, including regulatory hurdles, the integration of Spirit AeroSystems, and longer-term competition from Airbus.
“Even with all the positive data points, trust between BA and its shareholders, customers and regulatory agencies is extremely fragile,” the analysts wrote. “After years of missteps, it will only take one failure to send the ‘boulder’ rolling back down the hill.”
Still, the report struck a notably optimistic tone, describing Boeing as emerging from a period of crisis management and strategic realignment. Ortberg, who took over as CEO in August, has managed through a series of critical challenges, including a 53-day machinists’ strike and the implementation of new safety and quality systems.
The analysts also pointed to Boeing’s ongoing efforts to strengthen its balance sheet, starting with the planned $10.6 billion sale of its Digital Aviation Solutions unit.
Shares of Boeing climbed 2.2% on Monday afternoon.