Aerospace stock Boeing (NYSE:BA) has taken on a starring role in U.S. trade talks under President Trump’s administration, turning into a key asset in the country’s economic diplomacy playbook.
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Take the massive $200 billion deal with Qatar Airways, for instance. Announced during Trump’s Middle East tour, the agreement covers the purchase of 160 jets, a clear signal that Boeing is more than just a plane maker; it’s now a symbol of America’s push to boost exports and support domestic manufacturing.
That hasn’t gone unnoticed by Bank of America analyst Ronald Epstein, who was quick to upgrade his rating on BA from Neutral to Buy, while also raising his price target to a Street-high $260. If the target is achieved, Boeing shares could provide 23% returns over the next 12 months. (To watch Epstein’s track record, click here)
“We do see the progress in stabilizing production, carve-outs alleviating FCF burn, and a renewed focus across the portfolio all performing in concert with the ‘favored trade mechanism’ status creating a buying opportunity,” Epstein opined. “We also think BA is poised to continue to alleviate its stretched balance sheet. That effort started with the planned sale of Digital Aviation Solutions for ~$10.6bn. We anticipate more deals, which would provide further optionality for cash uses, support keeping the IG the credit rating, and drive more resources to core operations.”
Still, it’s not all clear skies for Boeing. While Epstein sees encouraging signs in the company’s turnaround, several hurdles remain. In the short term, Boeing needs the FAA to lift the cap on 737 production, smoothly absorb Spirit AeroSystems, and stay on track with key defense contracts. Looking further ahead, the company faces mounting pressure to invest in a next-generation aircraft if it wants to claw back market share from Airbus. And perhaps most critically – trust is still on shaky ground. Years of setbacks have left a deep dent in confidence, and despite recent progress, it wouldn’t take much to unravel it all.
Overall, Boeing stock currently enjoys broad support from Wall Street. Aside from three Hold ratings and a single Sell, the aerospace giant’s Strong Buy consensus is built on 16 Buy ratings. However, after a 55% rally from April’s low, the average price target of $217.32 suggests only a modest ~3% upside from current levels. It will be interesting to see whether other analysts follow BofA’s lead and raise their targets. (See BA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.