On Wednesday, Citi reaffirmed its confidence in Boeing (NYSE:BA) stock with a steadfast Buy rating and a price target of $224.00.
The endorsement follows recent reports of significant aircraft campaigns by international airlines, which are expected to bolster wide-body aircraft production. Notably, Turkish Airlines is in the market for approximately 250 planes, Qatar Airways for 200, and Flyadeal for 20.
The analyst from Citi believes that the bulk of these orders will likely consist of Boeing's 787 and 777 models, alongside Airbus's A350. This anticipated demand is seen as a positive sign, potentially leading to increased production rates. Boeing has set production goals of ten 787s and four 777s per month by the year 2026.
The 777X model, which is still awaiting certification, is slated for its initial delivery in 2025. The certification and anticipated ramp-up in production for Boeing's wide-body aircraft are forecasted to significantly contribute to the company's free cash flow (FCF) growth. The analyst expects that this growth will eventually exceed Boeing’s long-standing target of $10 billion.
These developments come at a time when the aerospace industry is closely monitoring production and delivery schedules, with Boeing's progress on wide-body aircraft being a particular area of focus. As such, the Citi analyst's projections underscore a positive outlook for Boeing's financial trajectory in the coming years.
InvestingPro Insights
As Boeing (NYSE:BA) secures its position in the wide-body aircraft market with potential new orders, it's important for investors to consider the company's financial health and market performance. According to InvestingPro data, Boeing has experienced a significant return over the last week with a 9.89% price total return, reflecting investor optimism. Despite a challenging financial landscape, as indicated by a negative P/E ratio of -53.02 and an adjusted P/E ratio for the last twelve months as of Q1 2024 of -92.01, the company's revenue has grown by 8.37% during the same period. Additionally, Boeing's market capitalization stands strong at $115.79 billion.
InvestingPro Tips reveal that analysts have recently revised their earnings expectations downwards for the upcoming period, which may warrant caution. Moreover, the company's gross profit margins remain weak at 11.48%, underlining the cost challenges Boeing faces. Investors should note that the company is a prominent player in the Aerospace & Defense industry, yet analysts do not anticipate profitability this year, and it has not been profitable over the past twelve months. For those looking to delve deeper into Boeing's financial metrics and future prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/BA. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to comprehensive analysis and insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.