stock isn’t a Sell anymore. At least for one person.
Tuesday, Bernstein analyst Douglas Harned upgraded Boeing (ticker: BA) shares to the equivalent of Hold from Sell. The upgrade isn’t helping the stock, which has dropped 3.2% to $227.58 on Tuesday.
Any upgrade is good for a stock, but an upgrade to Hold isn’t exactly a ringing endorsement. Still, Boeing (ticker: BA) stock started off Tuesday doing a little better than the overall market. The stock was up about 0.3% in early trading Tuesday, while the
Dow Jones Industrial Average,
each of which include Boeing stock as a component, started the day down a little.
Boeing is facing headwinds. The company’s woes have been well documented. The 737 MAX was grounded world-wide from March 2019 until December 2020 after two deadly crashes within five months. The 787 widebody jet suffered some quality problems in manufacturing. And, or course, there is Covid-19 that crushed demand for commercial air travel and generated billions in losses for Boeing and its airline customers.
But things are looking a little better and “company-specific obstacles” have come down, according to Harned. The 737 MAX and the 787 are both shipping to customers again. As a result, he took his rating up one notch, and lifted his price target to $229 from $196.
“We still view recovery for commercial aircraft [makers] as a long process, given a mixed global-recovery path, amount of excess capacity in the market, and performance challenges facing many airlines,” Harned wrote. Uncertainty post-Covid-19 recovery keeps him on the sidelines. He has a Hold rating on Boeing peer
(AIR.France), as well.
About 52% of analysts covering Boeing stock rate it at Buy. The average Buy-rating ratio for stocks in the Dow is about 60%. Boeing’s Buy-rating ratio has fluctuated widely over the past couple of years. Before the MAX was grounded, about 80% of analysts recommended the stock. The ratio fell to less than 40% in August 2020 before rebounding.
The average analyst target price is about $257—almost $30 higher than Harned’s target price.
Boeing stock is up about 10% year to date. Shares are down about 47% from their all-time high of $446 in March 2019.
Write to Al Root at [email protected]