By Boeing stock saw a slight pause in its upward trajectory on Monday before resuming its climb on Tuesday. However, the German airline Lufthansa’s announcement of buying 100 MAX jets is not the sole reason behind the stock’s surge.
In midday trading on Monday, Boeing stock experienced a rise of about 1.4%, surpassing the gains seen in the S&P 500 and Dow Jones Industrial Average, which were up by 0.4% and 0.5% respectively.
Although the considerable order from Lufthansa certainly contributes to the positive momentum, it is essential to note that Boeing’s backlog of over 5,300 jets – including 4,000 737 model jets – plays a significant role in driving the company forward.
With such a massive workload to complete, Boeing is projected to deliver approximately 520 jets in 2023. To put this into perspective, the most productive year for Boeing thus far was in 2018 when they delivered around 800 jets.
Amidst these developments, the primary reason for the continuous rise in Boeing stock lies in the increasing Wall Street price targets. Recently, BofA Securities analyst Ronald Epstein raised his price target for Boeing stock from $250 to $275, while also expressing confidence in a Buy rating for the shares.
Boeing’s Improved Outlook and Rising Price Targets
Boeing’s future looks promising, with a higher target on the horizon. The positive outlook is largely influenced by the anticipated improvement in interest rates and the expected increase in MAX jet production.
By December, Boeing plans to manufacture more than 30 MAX jets per month, with further plans to ramp up production to 38 jets per month by 2024. In 2023, Boeing has already delivered 343 MAX jets, averaging about 31 per month. However, it is essential to note that some of these deliveries are still sourced from inventory.
Following the grounding of the MAX planes worldwide from March 2019 to November 2020 due to two tragic crashes, Boeing built and stored multiple MAX jets.
Notably, Epstein is not the only one to raise his price target for Boeing shares. The average price target has recently increased by approximately $15, reaching $265 from around $250.
The sentiment on Wall Street is becoming more positive regarding the recovery of the commercial aerospace industry. Investors are also considering higher estimates for 2025 and 2026 when evaluating Boeing stock, beyond the previously focused 2024 projections.
The rising price targets have undoubtedly been a tailwind for Boeing shares. In December alone, the stock has surged by about 12%, outperforming the Nasdaq Composite by around 7 percentage points. Interestingly, the stock has experienced gains on 11 trading days this month, with only two instances of decline.
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