On Thursday, Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on Boeing (NYSE:BA) stock, with a steady price target of $225.00. The endorsement comes as the aircraft manufacturer shows signs of increased delivery activity, particularly for its 737 MAX model. According to available flight data, Boeing has delivered 12 commercial aircraft thus far in June, with 11 of these being 737 MAX planes and one 787.
The bank's analysis indicates that Boeing's delivery rate for its 737 MAX has seen a notable increase compared to the previous month. In early June, Boeing handed over 11 737 MAX aircraft, outpacing the four delivered during the same period in May.
The latest deliveries include three 737 MAX planes from long-term storage and eight fresh from the production line or work-in-progress inventory. Among these, ten were -8 variants and one was a -9 variant, while the single 787 delivery was a -10 model.
Despite the uptick in 737 MAX deliveries, Deutsche Bank noted that widebody aircraft momentum remains subdued. The bank also monitored departures from Boeing's Renton facility, where the 737 is assembled, to gauge production rates.
As of June 12, approximately 14 aircraft have flown out of Renton, indicating a positive trend in assembly rates and aligning with management's recent comments on the program's progress.
While the analyst expressed optimism over the 737 MAX program's trajectory into June, there is a desire for improved delivery performance across other models, such as the 777 and 787. The current focus, however, highlights the 737 MAX's recovery as a key driver of momentum for Boeing.
In other recent news, Boeing's earnings outlook has improved, with BofA Securities raising its price target for the company's shares to $200, citing a shift from burning cash to generating free cash flow.
However, the firm maintained a neutral stance due to ongoing challenges including the pending closure of the Spirit AeroSystems (NYSE:SPR) deal and labor union negotiations. Analysts at UBS also adjusted Boeing's price target, albeit downwards to $240, while maintaining a buy rating on the company's shares.
In regulatory developments, the Federal Aviation Administration (FAA) extended its increased oversight of Boeing and its key supplier, Spirit AeroSystems, indefinitely. This decision follows an in-flight emergency involving an Alaska Airlines Boeing 737 MAX 9 earlier this year. Boeing has also communicated to the U.S. Justice Department that it did not breach the terms of a deferred prosecution agreement related to the 737 MAX crashes.
In terms of performance, Boeing reported a significant drop in plane deliveries for May, with only 24 commercial jets delivered, marking a 52% decrease from the same month in the previous year. Despite this, the company secured four gross new orders in May, all for 787-10 Dreamliners destined for Eva Air.
In space travel, Boeing's Starliner spacecraft successfully docked at the International Space Station, marking a crucial milestone for the company. This achievement positions Starliner as a potential competitor to SpaceX's Crew Dragon capsule. These are among the recent developments for Boeing, as the company navigates various challenges and opportunities.
InvestingPro Insights
Boeing's recent uptick in 737 MAX deliveries, as noted by Deutsche Bank, aligns with a broader context observed through InvestingPro's real-time metrics and analysis. With a market capitalization of $112.0 billion and revenue growth of 8.37% over the last twelve months as of Q1 2023, Boeing remains a significant entity in the aerospace and defense industry. However, challenges are evident, as the company is not expected to be profitable this year, and the stock has experienced a considerable 27.2% drop in price over the last six months.
InvestingPro Tips suggest Boeing is a prominent player in its industry but suffers from weak gross profit margins, which stand at 11.48%. The company's stock price has been quite volatile, with a -29.92% year-to-date total return as of the date provided. Additionally, Boeing does not pay dividends, which might be a factor for income-focused investors to consider. For those looking to delve deeper into Boeing's financial health and stock performance, InvestingPro offers additional tips and insights. Our platform currently lists 10 more tips that can help investors make informed decisions. Use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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