Boeing Presses Survival Mode; Analysts Weigh In

The promise of a $2 trillion stimulus program was received with widespread relief across Wall Street, none more so than by investors of beleaguered airline Boeing (BA). BA stock jumped over 60% in the past 3 trading sessions. Yet, even following the surge, Boeing’s share price is down by 50% year-to-date. So, following months of the stock’s decline, is Boeing finally on the mend?

Jefferies Sheila Kahyaoglu believes there are better days ahead for the A&D giant. The 5-star analyst maintains a Buy on Boeing, along with a price target of $185, which implies nearly nearly 16% upside from  current levels. (To watch Kahyaoglu’s track record, click here)

In light of recent events, the uptick couldn’t have come at a better time, as the headlines regarding Boeing have been negative almost to a fault over the last week.

The first major concern among investors involves the rather large issue of whether Boeing is on the verge of bankruptcy. The company has requested $60 billion in federal aid to help shore up its aerospace ecosystem.

Boeing also announced recently that the pause on its share repurchases, suspended since April 2019, will be extended until further notice. “We do not assume any share repurchases in our model until H2:22. Longer term, this could mean BA has to operate with $15-20BB of cash on its balance sheet vs. the ~$10BB buffer it previously operated under,” Kahyaoglu said.

With no bailout yet announced, in a further effort to conserve cash, the company announced it is also suspending it’s $4.6 billion dividend, also “until further notice.” Additionally, in response to the COVID-19 outbreak, the embattled airline has suspended operations at its Puget Sound area facilities, from March 25 up until April 8.

So, what does the rest of the Street currently make of Boeing’s prospects? Looking at the consensus breakdown, 5 Buys, 13 Holds and 1 Sell add up to a Hold consensus rating for BA. There’s plenty of upside, though, 41%, as it happens, should the average price target of $224.37 be met over the following months. (See Boeing stock analysis on TipRanks)


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