Will Boeing Take Off in 2022?


The COVID-19 pandemic disrupted nearly every industry in some way, with it hitting the aerospace sector especially hard. If no one is flying, companies won’t want to continue ordering and paying for new airplanes. Boeing (BA) was already in a precarious position with its 737 MAX saga, but the company has been emerging from its slump and is poised for potential upside. (See Analyst Top Stocks on TipRanks)

One analyst on the bullish side of the fence is Sheila Kahyaoglu of Jefferies Group, who wrote that the Chinese regulatory recertification of the 737 MAX plane could be a “major opportunity” for BA. Additionally, while restarting production on the 787 is not likely in the near-term, this could occur in 2022.

Kahyaoglu maintained her Buy rating on the stock, and provided a price target of $300 per share. This target represents a potential 12-month upside of about 34.58%, at the time of writing.

The recertification by Chinese regulators is particularly significant for the aircraft manufacturer, as the nation represents about 20% of Boeing’s backlog in undelivered planes. Meanwhile, year-over-year, BA has improved on its overall deliveries.

As the 737 MAX planes required work during their multi-year grounding, Boeing had diverted resources to rectifying issues in order to get them back into the air. As more of the troubled aircraft are sent out, Boeing will have more operating leverage to ramp up its production.

While BA faces several globally significant challenges, the aircraft producer has yet to recover in valuation from its pre-pandemic peaks. Once these issues are resolved, the analyst expects investors who held on to benefit.

On TipRanks, Boeing has an analyst rating consensus of Moderate Buy, based on 7 Buy and 5 Hold ratings. The average Boeing Company price target is $275.36, implying a potential 12-month upside of 23.64%.

Disclosure: At the time of publication, Brock Ladenheim did not have a position in any of the securities mentioned in this article

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