Boeing Co (NYSE: BA) will take at least three years to return to its pre-pandemic stock price, but it’s still a fantastic investment for the next twelve months, says Colin Scarola. He’s a Senior Equity Analyst at CFRA Research.
What could serve as a catalyst for the Boeing stock?
A steady increase in the free cash flow, as per Scarola, will serve as a catalyst for the stock moving forward. He’s convinced the FAA will certify 787 for deliveries by the end of 2022 as well.
On Monday, Delta Air Lines said it’s buying one hundred “737 Max”, which the CFRA analyst reads as a massive vote of confidence in Boeing. On CNBC’s “Power Lunch”, he said:
Delta’s order today, huge backlog of orders with Southwest and United shows there’s huge confidence in that plane. People want it for its high-performance and a better price point. So, this could be a very attractive investment over the next year.
He has a price objective of $252 on “BA” that translates to a more than 70% upside from here.
Boeing is clawing its way back out of operational challenges
Boeing is committed to lower prices of late to redeem the share it lost to Airbus due to “operational challenges” over the past three years.
Those issues that once made a notable dent in its reputation, however, are now starting to subside, Scarola added.
Over the long term, [Boeing] still has very good fundamentals. They have major operational problems, but month by month, Boeing is starting to show us that it’s overcoming them. This is still a very valuable duopoly in a long-term growth market.
Wall Street, at present, also rates the stock at “overweight”.
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