Boeing stock, up more than 60% since early April, received an upgrade on Monday as the Dow Jones aerospace manufacturer continues to improve operations and plays an increasingly important role in Trump administration trade negotiations.
BofA upgraded Boeing stock to buy from neutral and hiked its price target to a Wall Street high of 260 from 185, The Fly reported. Analyst Ronald Epstein wrote that Boeing aircraft have emerged as a favored negotiating tool for the Trump administration in recent trade deals. Agreements with the U.K., Qatar, the United Arab Emirates and China have set a precedent for future global negotiations, to Boeing's benefit, Epstein wrote.
Meanwhile, Boeing has made progress to stabilize production and establish carve-outs to alleviate its free cash flow burn. CEO Kelly Ortberg last week said that 737 MAX production is nearing 38 planes per month, which is the limit set by the Federal Aviation Administration. Boeing hopes to lift it to 47 by the end of the year. Output of 787s is going from five to seven per month, after completing a review with the FAA.
BofA wrote that the renewed focus across the company's portfolio, combined with the "favored trade mechanism" status presents investors with a buying opportunity.
Meanwhile, Boeing jet deliveries to China could possibly resume this month after the U.S. and China agreed to a truce.
New Orders
Elsewhere, Air India is in talks with Boeing and Airbus for a new aircraft order, Reuters reported Sunday night. The discussions revolve around an order for 200 extra single-aisle planes as part of the airlines multibillion dollar revamp, industry sources told Reuters.
The order would be on top of a massive 2023 deal, where Air India placed an order for 470 planes from Airbus and Boeing. That was followed by another 100-jet deal with Airbus.
The current discussions could involve hundreds of aircraft across various sizes, and could include a previously-reported plan to acquire more wide-body planes, according to Reuters.
Meanwhile, Vietnam Airlines is on the verge of finalizing an order for 50 Boeing 737 Max jets, Reuters reported separately on Monday citing an unnamed company executive. The deal stems from a provisional agreement that was signed in 2023 and is expected to be completed "very soon."
Vietnam Airlines may require as many as 100 new narrow-body planes by 2035 as part of a fleet renewal and expansion initiative. In a separate move in April, Vietnam Airlines signed a memorandum of understanding with Vietcombank for financial support related to to purchase of 50 narrow-body jets, according to Reuters. That memo did not specify a manufacturer for the planes.
Boeing Stock Performance
Boeing climbed 2% Monday to 211.47.
BA shares have rallied 64% from their April 7 low of 128.88.
Boeing stock is trading just above a 209.66 buy point of a nine-day pattern. Shares briefly climbed above the entry on Thursday. The move offers an alternative entry after Boeing became extended from a double-bottom base with a 184.40 buy point. Boeing broke out from that pattern on April 28.
Boeing's 21-date average true range ratio is 2.37%.
The average true range is a metric available on IBD's MarketSurge that 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.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
BA stock is up more than 19% this year.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
