The aircraft manufacturer Boeing is currently in the headlines mainly because of numerous breakdowns. Boeing shares have been severely punished since the beginning of the year. However, analysts believe that joining the struggling aircraft manufacturer could be worthwhile right now.
• Series of mishaps at Boeing never ends
• Boeing shares plummeting
• Analysts see buying opportunity at a bargain price
The reports of – sometimes life-threatening – breakdowns with Boeing aircraft have not stopped in recent weeks. Since the beginning of the year, a cabin part of one of the US company’s aircraft has torn off in flight, another aircraft lost a wheel during takeoff and a cover on another Boeing aircraft broke off in flight. This series of mishaps recently led investors to sell off Boeing shares in droves: Since the beginning of the year, the Airbus competitor’s shares on the NYSE have already lost around 28.1 percent of their value (as of: closing price on March 26, 2024). . However, analysts currently assess the situation at the US aircraft manufacturer as positive – and advise investors to buy Boeing shares.
Of 24 analysts recorded by “TipRanks”, 17 recently gave a “buy” rating to the crisis-plagued US group. The recommendation from seven other experts is currently “Hold”. Interesting: Despite the recent series of mishaps, none of the experts recorded on “TipRanks” recommend selling Boeing shares. The analysts’ average price target is $247.91, a significant 32.22 percent above the last closing price of the share (as of March 26, 2024).
UBS analyst: Boeing shares are currently available at a bargain price
An analyst who published numerous comments on Boeing in March and always suggested that investors should add Boeing shares to their portfolio is Gavin Parsons from the major Swiss bank UBS. He recently assigned a price target of $250 for the aircraft manufacturer’s shares, which is almost in line with the analyst average.
Parsons notes in one of his analyzes that many investors are currently struggling to buy Boeing stock given the “uncertainty surrounding regulatory actions, 737 Max production rates, and Max 7 and Max 10 certifications.” He described the safety-related reduction in production at Boeing as a “perspective decision”. The risk reduction is certainly not a price driver, but the demand for new aircraft remains robust and Boeing is immediately addressing safety concerns from the regulatory authorities, wrote the UBS expert. For the full year, Parsons expects a “positive cash flow for Boeing in the low single-digit billion dollar range” and in two to three years the cash flow should be significantly higher again with normalized production. The fact that the market for commercial aircraft will be undersupplied in the coming years is likely to contribute to this development. Airbus currently only has limited capacity to expand its market share and fill the gap caused by Boeing’s production cuts, according to the analyst according to “Yahoo Finance”.
The expert also rates the possible takeover of the supplier Spirit AeroSystems by Boeing as positive as well as the change in boss at the end of the year. The market is waiting for changes at the aircraft manufacturer and the personnel restructuring should be seen as a step to get the group back on track, wrote Parsons about the surprising personnel changes.
Overall, the UBS analyst currently sees a good buying opportunity in Boeing shares. With a price loss of almost 30 percent since the beginning of the year, the share is now trading at just 11 times the expected free cash flow of ten billion US dollars, according to the expert. The share is therefore attractively valued. Therefore, long-term investors in particular would now have the chance to purchase the Boeing stock at a bargain price.
Other experts are also confident in Boeing
Other analysts currently assess the situation similarly to UBS expert Parsons. The rating for Boeing shares given by Ken Herbert from the Canadian bank RBC is “Outperform”, but his price target of $225 is slightly lower than that of the UBS expert. Nevertheless, this target value still signals clear upward potential for the share.
Like Parsons, Herbert also viewed the announced change in leadership at Boeing as positive – especially since the company wanted to fill the position with an external candidate. Investors have lost confidence in management in view of the increasing number of events, said the RBC analyst. Therefore, a new boss from outside is likely to be well received by investors. In a previous study, Herbert also noted that Boeing was confident that demand would continue to be strong – both in the commercial aviation and defense sectors. In addition, expected bottlenecks in production capacity in the coming years could boost the downstream maintenance business.
Other analysts who recently recommended that investors buy Boeing shares include Noah Poponak of Goldman Sachs and Seth Seifman of JPMorgan. Among other things, Poponak pointed to Boeing’s “well-filled” order book, while Seifman commented positively on the possible purchase of Spirit AeroSystems. According to the JPMorgan expert, it would make sense for Boeing to integrate Spirit and thus control the production of its key structures.
However, it will only become clear in the next few months whether the optimistic analysts are right with their statements about Boeing and whether investors can actually make profits with this stock. So far, the balance of Boeing shares remains negative – both with a view to the past 1-month period as well as for the last three months and the past 52 weeks.
Editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
Selected leverage products on Airbus
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on Airbus
The leverage must be between 2 and 20
Advertising