TD Cowen maintains Outperform Rating on Boeing, expects stock to move quickly

Investing.com -- TD Cowen reaffirmed its Outperform rating on Boeing (NYSE:BA) in a note Thursday, increasing the price target to $200 from $190.

The bank cites a combination of improving fundamentals and strategic shifts as key reasons for the upgrade, predicting that Boeing's stock could see a swift upward trajectory as execution improves.

Boeing's challenging year, marked by a 31% year-to-date decline in its stock price, which TD Cowen says has positioned it as a potential "Dog of the Dow" recovery trade.

The bank's analysts note the slump is down to the company's "especially tough year," which included intensified FAA oversight following a January accident, a 53-day strike, a CEO change, a $15 billion cash burn, and supply chain delays.

However, the firm believes these issues set the stage for a turnaround in 2025 and beyond, noting that "we expect the stock to move quickly, given the inflection (post-strike airplane production) is occurring now."

Looking further out, TD Cowen emphasizes Boeing's potential for significant free cash flow (FCF) growth, estimating $10-12 billion in FCF by 2028.

While challenges remain—such as certification delays for the 777X and production timing—the bank highlights the "dramatic" direction of Boeing's FCF growth, supported by improved margins on key models like the 787 and 737.

Boeing's leadership is also said to be streamlining its focus on core operations, with TD Cowen highlighting the company "may divest BGS [Boeing Global Services] assets."

TD Cowen concludes that Boeing's recovery potential and strategic focus make it a compelling opportunity, stating, "History shows that when BA's stock starts to 'work,' it can overshoot to the upside as investors reposition into the long cycle bellwether."