Boeing stock target cut at Bernstein on slashed FCF estimates

In a note on Monday, Bernstein analysts lowered their price target for Boeing (NYSE:BA) shares from $272 to $240 while maintaining an Outperform rating on the stock. The revision comes in the aftermath of the January 5th MAX-9 accident involving Alaska flight 1282, which Bernstein views as putting Boeing’s stock in a state of uncertainty until three key issues are resolved.

The firm has adjusted its delivery and free cash flow (FCF) forecasts downward, now anticipating FCF of only $1.6 billion for 2024 and $8.5 billion in 2026, aligning with the company’s previous guidance. Bernstein emphasized the necessity for signs of recovery to restore confidence in a longer-term production ramp-up, citing ongoing conflicts on the factory floor, particularly the relationship between Boeing and Spirit, which have yet to be resolved.

Furthermore, Bernstein noted the growing criticism of Boeing by airline customers, raising the possibility that some airlines may consider replacing 737s in their fleets with A320 family aircraft. This potential shift in market share could lead to a significant long-term impact, a scenario that was previously deemed unlikely.

Despite these challenges, Bernstein maintains its belief that Boeing will continue to be part of a successful duopoly in the aerospace industry. However, analysts acknowledge that the path forward is more uncertain, and the ultimate outcome may leave Boeing in a comparatively weaker position than before.