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Citi upgrades Boeing to a buy citing BA’s ability to meet production and profitability targets

Citi upgrades Boeing to a buy citing BA's ability to meet production and profitability targets
Dino Kurbegovic

On June 16, Boeing (NYSE: BA) was upgraded from a Hold to a Buy/High Risk with a price target of $209. This upgrade hinges on the aerospace giant’s ability to resolve its medium-term risks, while the suggested price is actually a cut from $219 to $209. 

Citigroup (NYSE: C) analyst Jonathan Raviv stated that the 747 MAX and the 777 X present the biggest challenge. If production and delivery levels are achieved, he sees the stock performing better. 

“If the 737MAX, 777X (both of reasonable concern to us) and the 787 (of less concern) programs achieve our forecast levels of production and profitability, we estimate the fair value to be $209/sh (our new target price), implying ~70% upside. 

The market analyst added:

“ If the 737MAX and 777X only achieve our downside case, we estimate value to be $116/sh, marginally below the current share price. And, if all three programs go badly, we see value at about $84/sh, ~30% below the current price.”  

BA chart and analysis 

Despite the stock being a downward trend, recent sessions have seen increased trading volumes, and the shares jumped back above the 20-day Simple Moving Average (SMA). 

A resistance line has been formed around the $140 line, and if the stock manages to break above, some upside could be seen.

BA 20-50-200 SMA lines chart. Source. data. See more stocks here.

Meanwhile, analysts rate the shares a strong buy, predicting that the average next 12 months price could reach $214, which is 60.43% higher than the current trading price of $133.39.

Wall Street BA analysts’ price targets for BA. Source: TipRanks

In essence, Citi’s preferred airline stock is Airbus (OTCPK: EADSF) since it has materially lower risk, according to them.

Alternatively, BA shares have jumped 17% in the past two trading sessions, but it is still difficult to determine whether this trend will continue. 

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