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JPMorgan Chase Sees More Upside in Boeing’s Share Price

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JPMorgan Chase raised the target price

Boeing (BA) shares have gained immensely YTD (year-to-date). Boeing has outperformed the returns from its peers and US market indexes. However, the stock doesn’t have limited upside potential.

On February 11, Seth Seifman of JPMorgan Chase (JPM) reiterated his “overweight” rating and raised the target price on the stock due to an improved FCF (free cash flow) outlook for 2020. Seifman said that after going through Boeing’s latest annual report, he thinks that the company will generate a FCF of $16.3 billion or $30 per share in 2020. He argued that the company is positioned to gain from positive aerospace fundamentals and opinions that the stock isn’t over-owned.

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Seifman’s new target price of $450 on Boeing stock is $25 higher than his previous estimate. The target price signifies an upside potential of 11.4% from the closing price of $403.95 on February 11. Seifman’s target price is also much higher than the consensus target price of $440 polled by Reuters.

Best Dow 30 index performer

Boeing shares have gained solid momentum since the beginning of 2019. The stock has risen 25.3% YTD and outperformed the returns of major US indexes like the Dow, the NASDAQ, and the S&P 500. So far in 2019, the Dow, the NASDAQ, and the S&P 500 have risen 7.4%, 10.1%, and 8.1%, respectively. The stock has also outperformed the Industrial Select Sector SPDR ETF’s (XLI) returns, which have risen 14.1% during the same period.

Boeing is also the best performer among the stocks that make up the Dow 30 Index. With a YTD gain of 17.9%, IBM (IBM) is the second-best performer, followed by United Technologies (UTX) with 15.3% and Goldman Sachs (GS) with 14.5%.

In the last few months, analysts and investors have become increasingly optimistic about Boeing’s future performance. The company has solved issues with its suppliers, which should help it achieve its planned annual production target.

With production enhancements, Boeing should be able to make more deliveries and generate higher revenues and cash flows. Last year, the company made a record shipment of 806 jets.

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