Deutsche Bank's assessment of Boeing (NYSE:BA) stock indicates a perceived market capitulation after shares dropped nearly 8% on Tuesday.
Analysts said yesterday’s price action was reminiscent of a previous significant drop. Along these lines, they see an attractive risk-reward at current levels.
“The risk to $180 offers a relatively modest 10% downside, whereas our updated 12-month target price of $295 offers 47% upside—a nearly 1/5 risk/reward ratio,” the analysts wrote in a note.
Despite the likelihood of lower estimates, Boeing is perceived to be trading at a 9.5% Free Cash Flow (FCF) yield on the 2026 forecast, potentially below its peak. Analysts argue that tail risks, such as an extended production slowdown, seem remote, emphasizing that halting or significantly slowing production may be counterproductive.
With the stock possibly oversold at $200, Deutsche’s analysis suggests a potential misalignment between the market perception and underlying factors affecting Boeing's valuation. The broker's new price target on BA stock is $295 per share, down from the prior $325.
Boeing reports 4Q23 results on January 31st.
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