Shares of Dow Jones component Boeing (BA) may have reached cruising altitude following a strong year-end performance, according to analysts at Morgan Stanley. Boeing stock soared nearly 60% over the past three months. BA shares fell premarket Tuesday after the downgrade.
Boeing stock is reaching fair valuation at current levels, Morgan Stanley analyst Kristine Liwag wrote in a research note Tuesday. Most of the short- and medium-term catalysts for the stock have been realized, she says.
Going forward, Liwag said 2025 and 2026 production rate targets and free cash flow generation would drive valuation of Boeing shares. Liwag downgraded BA stock to Equal Weight from Overweight. With the new rating, Liwag raised her price target on the Dow Jones stock to 220 from 213 — not quite 6% above where the stock closed on Monday.
BA shares rose in mid-December after United Airlines (UAL) agreed to purchase 100 787 Dreamliner jets to replace its aging widebody fleet. The deal, which included an option to buy 100 additional jets, marked the largest Dreamliner order in Boeing history. Deliveries to United are expected to take place between 2024 and 2032, according to the companies.
Boeing Stock Performance
The Dow Jones stock glided about 2.7% lower premarket Tuesday following the rating news. Shares leapt 11.5% this past month and rocketed 58.5% over the last three months. Boeing stock is up about 20% after clearing a bottoming base entry at 173.95 in mid-November.
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