Rothschild & Co Redburn sees a buying opportunity in Boeing , citing the stock’s pullback since its third-quarter earnings release. In a note published on Tuesday, analyst Olivier Brochet reiterated a buy rating on the aerospace and defense stock, but trimmed his price target by about 6% to $255 from $270. Still, the revised objective implies potential 37% upside ahead for the stock, based on Boeing Monday close. More optimistically, Brochet’s 2030 sum-of-the-parts valuation and price-to-cash-flow ratio could translate into even more outperformance ahead. “Fundamentally, this puts Boeing on a path where the stock could almost double from its current level by the end of the decade,” he wrote. Shares of Boeing are now up 14% for the year, but have fallen 15% since its third-quarter earnings release on Oct. 29 while the S & P 500 is little changed in the same period. The pullback has opened up an attractive entry point for investors, Brochet said. BA YTD mountain BA YTD chart The analyst attributed the selloff to a larger-than-expected accounting charge taken for the Boeing 777X. A slower-than-expected delivery rate for the Boeing 737 also hurt the stock. “While we understand why investors may be disappointed by the news flow and estimate cuts, we think the pullback offers a good buying opportunity in a long-horizon recovery story,” Brochet added. “The financial impact of the 777X delay and slower-than-anticipated acceleration in 737 deliveries [led] to earnings cuts and a target price revision, but the stock could double from here to the end of the decade.” Out year forecasts were unaffected by Boeing’s short-term issues, Brochet said. The analyst also applauded Boeing’s risk management, which should lead to fewer headwinds for the company in the future. He believes that “the next item likely to be cured” will be the FAA’s certification of the 737-7/-10. “The situation looks increasingly under control, as risk factors are retired one after another. This progressively reduces the likelihood of new earnings disappointments,” the analyst said. Brochet also expects Boeing to update the market on its free cash flow target sometime in 2026, once recently arrived CFO Jay Malave is established and his no-compete clause has expired. Increased production rates could boost Boeing’s free cash flow target by more than $2.5 billion, the analyst added.
