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Author: Alan LittleDate: 2020-12-09

Boeing (BA) shares take flight (+4.33%) on UBS upgrades

Boeing (BA) was trading 4% higher at midday on Monday after the aerospace company got a rating and price target upgrade from UBS.

Analyst Myles Walton said that internal forecasting at UBS had shown its free-cash-flow estimates for Boeing increasing just days after the 737 MAX finally returned to service with a flight from Dallas to Tulsa.

The fleet had been grounded for almost two years following fatal crashes in 2018 and 2019, but it was given the green light to return by the Federal Aviation Administration in November.

Walton was bullish in a note on Monday as he upgraded his rating for Boeing to buy and added 50% to a new $300 price target.

On the “out-year” free cash flow, Walton said: “We see advances coming back faster, with 50-plus-per month on the 737 in 2025 coupled with cost actions across the enterprise more than offsetting lower wide-body production.”

Boeing stock has been particularly volatile this year, slumping following the onset of the pandemic and its impact on aviation.

However, recent optimism about a rollout of vaccines has seen more investors buying back into key stocks and BA has soared 67% since 30th October.

Walton said that news of a 95% efficacy rate for vaccines from Pfizer (PFE) and Moderna (MRNA) was the catalyst for the recent “aero cycle” and that Boeing usually benefits when that happens.

Boeing shares were trading higher after the upgrade on Monday, rising 4.33% to $242.78 on the New York Stock Exchange.

Intel (INTC) went in the other direction, dropping 4.59% on the news that Apple (AAPL) could launch a new powerful series of microchips as early as spring 2021.




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