JPMorgan maintained an ‘Overweight’ rating and $290 price target on BA stock, calling the Navy fighter win ‘truly important’ while pointing to commercial production and cash flow per plane as longer-term financial metrics.
- William Blair kept its ‘Outperform’ rating and said Boeing’s latest fighter award adds to signs of improvement in its defense business.
- The F/A-XX contract is valued at more than $20 billion for the full-scale development phase and includes multiple test aircraft, according to the Pentagon’s announcement.
- Ethiopian Airlines reportedly agreed to buy 10 Boeing freighters, comprising eight 777-8Fs and two 777Fs, with an option for eight additional 777-8Fs.
Boeing (BA) stock drew investor attention on Wednesday after JPMorgan and William Blair weighed in on the company’s U.S. Navy sixth-generation fighter win.
JPMorgan maintained an ‘Overweight’ rating on the stock and William Blair retained its ‘Outperform’ rating, according to The Fly.
BA shares were trading marginally lower, while Northrop Grumman (NOC) shares were down more than 3.65% at the time of writing on Wednesday.
JPMorgan Calls Navy Win Important
JPMorgan maintained its ‘Overweight’ rating and $290 price target on Boeing, calling the Navy fighter win “truly important” for the company, according to TheFly.
The analyst said Boeing’s selection over Northrop Grumman was not a surprise and added that the company “has a lock” on sixth-generation fighters.
However, JPMorgan said the more meaningful financial development for investors over time will be Boeing’s progress in increasing commercial aircraft production and improving cash flow per plane.
William Blair Sees Defense Improvement
William Blair maintained its ‘Outperform’ rating on Boeing following the Navy award, according to TheFly.
The firm said the $20 billion-plus full-scale development program represents Boeing’s second major next-generation aircraft win after its selection to develop the Air Force’s F-47 fighter last year.
William Blair said the recent contract wins point to an improvement in Boeing’s defense business, according to TheFly.
The U.S. Navy selected Boeing to design, build and deliver its F/A-XX sixth-generation fighter, which is expected to replace the service’s F/A-18E/F Super Hornets and EA-18G Growlers beginning in the 2030s.
The F/A-XX contract is valued at more than $20 billion for the full-scale development phase and includes multiple test aircraft, according to the Pentagon’s announcement.
Free Cash Flow Target In Focus
William Blair expects Boeing to provide commentary on its previously announced $10 billion free cash flow target during the company’s third-quarter earnings call, according to TheFly.
The F/A-XX contract is valued at more than $20 billion for the full-scale development phase and includes multiple test aircraft, according to the Pentagon’s announcement.
Separately, Ethiopian Airlines signed an agreement on Wednesday to purchase 10 Boeing cargo planes, including eight 777-8Fs and two 777Fs, according to Reuters. The airline also has an option to purchase eight additional 777-8Fs.
Ethiopian Airlines CEO Mesfin Tasew said the aircraft have a catalog value of $5 billion, while the actual purchase price remains confidential. The airline currently operates 12 Boeing 777F cargo planes, along with three 767 freighters and four converted 737s, according to the Reuters report.
Retail View On BA
Retail sentiment on Stocktwits was ‘Extremely Bullish,’ with ‘High’ message volume over the past 24 hours. BA was also among the trending tickers on Stocktwits at the time of writing.
One Stocktwits user said they sold their BA position for a profit around a $195 level during an earlier rally and later bought back the stock on the dip.
BA shares have dropped over 13% year-to-date.
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