Even though the company and its shares have been under fire recently, the experts predict that Boeing (NYSE: BA) will soon be flying again.
According to one observer of the aeronautical behemoth, it will gain considerable height in the coming year or two. She has set a target price for the shares that is about 60% higher than their current value.
Boeing stock is currently selling at a low price. The last several years haven't been good for Boeing. Earlier this year, it had a humiliating mishap involving one of its 737-9 MAX jets when a door stopper came loose while in flight,
and it was severely impacted by the coronavirus pandemic earlier this decade, when air traffic dropped dramatically for understandable reasons. Problems with manufacture were discovered during a subsequent FAA quality control assessment.
Jefferies analyst Sheila Kahyaoglu nevertheless recommended buying the company at the end of March, despite all this. In addition, she stuck to her daring 12-month price objective of $300, which is 59.5% higher than the stock price of the aerospace business right now.
The 787 Dreamliner, a model produced by Boeing, is the foundation of Kahyaoglu's confidence. According to her most recent analysis of the firm, the plane "is set up favorably given positioning in an expanding widebody market." She estimates that by 2026, the 787 could produce $2.6 billion in FCF on its own.
Forceful winds The analyst is absolutely correct in being so optimistic about the 787's future, considering the surge in the tourism industry following the coronavirus pandemic and the consequent surge in customer demand in long-haul flights.
Quality control flaws are typically not easy to fix, and Boeing's reputational harm will take long to recover from. It's possible that Kahyaoglu's lofty price prediction for this stock over the next twelve months is unrealistically high.
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