Boeing stock climbed Monday on an analyst upgrade. Meanwhile, Riyadh Air has stepped up to buy jets on which China paused deliveries. Elsewhere, Airbus struck a deal to purchase multiple plants from Spirit AeroSystems.
Bernstein on Monday upgraded its rating on Boeing stock to outperform from market perform, noting that the Dow Jones manufacturer has made progress on its recovery, according to reports.
"Boeing is now making the progress it needed for the growth trajectory we expected before the Alaska door plug incident in January 2024," analysts led by Douglas Harned wrote. "While we cannot assume all risks are gone, after high FAA scrutiny, Boeing commercial airplanes should be on a much firmer path than 2023."
The analysts noted that commercial jet production has stabilized. Bernstein expects 737 MAX production to hit a rate of 38 planes per month by July, which is in line with its management expectations. That could increase to a rate of 42 jets per month by year-end. Production for the 787 program is also ramping up, and will likely hit seven planes per month in the second half of the year.
The defense outlook has also improved after Boeing was tapped by President Donald Trump to manufacture the F-47 fighter jet. The "win reinvigorates its defense business, without adding fixed-price development risks," Bernstein wrote.
Boeing still faces some tariff headwinds. Meanwhile, China halted deliveries of Boeing jets to its domestic airlines, prompting Boeing to shift orders or resell jets. Still, Bernstein believes the challenges are manageable.
CFO Brian West on the Boeing earnings call last week said the impact of tariffs on higher input costs is "manageable" and less than $500 million annually. "The halt to China deliveries is negative, but in the worst case those airplanes can easily be remarketed," Bernstein wrote. The firm lifted its price target on BA stock to 218 from 181.
Elsewhere, Riyadh Air has stepped up and offered to buy Boeing planes if they're not delivered to China.
Boeing CEO Kelly Ortberg during the investor call noted that customers in China have indicated that they will not take deliveries. The Dow Jones manufacturer originally planned for about 50 jets to China this year. But supplanting that demand does not appear to be an issue.
"We've made it quite clear to Boeing, should that ever happen, and the keyword there is should, we'll happily take them all," Riyadh Air CEO Tony Douglas said in an interview with Reuters.
Airbus
Elsewhere, Airbus on Monday announced that it entered a deal with Spirit AeroSystems to acquire some production facilities from the supplier, as part of Spirits acquisition by Boeing.
Per the agreement, Airbus will take over six Spirit AeroSystems facilities across the U.S., Europe and Morocco. Airbus will also acquire production components for the A320 and A350 in Prestwick, Scotland. Spirit also plans to sell its Subang, Malaysia site to a third-party owner.
Airbus will receive a $439 million payment from Spirit, subject to adjustments at closing. Spirit will also receive a $200 million noninterest bearing credit line from Airbus. Spirit will use the funding to support Airbus programs, according to the release. The companies expect to finalize the deal and transfer operations in Q3 2025.
The Spirit deal with Airbus was originally mentioned in Boeing's acquisition announcement.
In July, Boeing reached a deal to acquire Spirit AeroSystems for $4.7 billion, or $37.25 per share.
Boeing Stock, Airbus Shares
Boeing stock swung 2.4% higher Monday.
Shares are climbing up the right side of a steep double-bottom base with a 184.40 buy point.
BA stock has rebounded from its April 17 low of 128.88 and is now up about 3% on the year.
Boeing stock has a 21-Day ATR of 5.9%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Airbus stock rose 3.3% Monday. EADSY shares have fallen from their March high of 46.93 and are now up 3.8% in 2025.
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