- Citi analyst Charles J Armitage upgraded the aerospace and defense firm Boeing Co (NYSE:BA) to Buy/High Risk from Neutral and lowered the price target to $209 (implying an upside of 56.3%) from $219.
- The analyst seeks to value Boeing on the assumption that the (significant) medium-term risks can be mitigated while also quantifying those risks.
- Armitage expects 787 deliveries to resume soon and 737MAX to return to commercial service but mentions that these factors are "incrementally positive, rather than a step-change in risk."
- Related: Boeing Shares Take Off After China Southern Airlines Test Flight
- Armitage states that if the 737MAX, 777X, and the 787 programs achieve Citi's forecast levels of production and profitability, the estimated fair value will be $209/share (new target price), implying ~70% upside.
- However, if the 737MAX and 777X only achieve Citi's downside case, the estimated value will be $116/share, marginally below the current share price.
- Also Read: Boeing Now Has a Liaison To Raise Concerns For Employees Who Work On Behalf Of FAA: WSJ
- Lastly, the analyst states that Citi sees value at about $84/share, ~30% below the current price, if all three programs go badly.
- Additionally, Armitage stated that Airbus SE (OTC:EADSY) is "materially lower risk and is our preferred global aerospace pick."
- Price Action: BA shares are trading lower by 0.36% at $133.24 on the last check Thursday.
