TD Cowen cuts Boeing shares price target, maintains Buy tag By Investing.com

Shares of Boeing (NYSE: NYSE:) had their price target adjusted by TD Cowen, with the new target set at $200, down from the previous $230.

The aerospace giant’s stock continues to hold a Buy rating despite concerns over the potential impact of the ongoing IAM strike.

The strike by the International Association of Machinists (IAM) has raised concerns over Boeing’s ability to maintain its investment grade rating.

Analysts at TD Cowen suggest that the company could mitigate risks through the divestiture of non-core assets and securing equity. They anticipate a strong recovery for Boeing in terms of deliveries and free cash flow (FCF) between 2025 and 2027.

The revised price target of $200 reflects a 7.2% free cash flow yield for the year 2026, taking into account the risks associated with the current strike. Despite the reduction in the price target, TD Cowen reaffirms its Buy rating on Boeing shares, signaling confidence in the company’s long-term prospects.

In other recent news, Boeing has been in the limelight with the NTSB identifying potential safety risks in the rudder control systems of Boeing 737s, impacting over 40 international operators.

This follows an incident involving a United Airlines flight where the rudder pedals jammed during landing. The NTSB is also investigating a similar event at Newark airport involving a United Boeing 737 MAX 8.

Boeing is also facing employment concerns among its suppliers due to an ongoing strike, which has led to furloughs at companies like Pathfinder Manufacturing. The strike has also stalled wage talks between Boeing and the International Association of Machinists and Aerospace Workers (IAM), with no further discussions scheduled currently.

Amidst these developments, a U.S. District Judge is set to review Boeing’s proposed plea deal related to the two Boeing 737 MAX crashes, following objections from the victims’ families. Lastly, the NTSB has recommended immediate safety checks on the Boeing 737’s rudder control system.

InvestingPro Insights

Recent InvestingPro data paints a complex picture for Boeing, aligning with TD Cowen’s cautious yet optimistic outlook. The company’s market capitalization stands at $93.68 billion, reflecting its significant industry presence. However, Boeing’s financial health shows some strain, with a negative P/E ratio of -33.02 over the last twelve months as of Q2 2024, indicating current profitability challenges.

InvestingPro Tips highlight that Boeing is trading near its 52-week low and has experienced a significant price drop over the last three months, with a 3-month price total return of -18.56%. This aligns with TD Cowen’s reduced price target and the market’s reaction to ongoing challenges, including the IAM strike.

Despite these headwinds, InvestingPro Tips also note that Boeing remains a prominent player in the Aerospace & Defense industry. This status supports TD Cowen’s maintained Buy rating and expectation of a strong recovery in deliveries and free cash flow between 2025 and 2027.

For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Boeing, providing deeper insights into the company’s financial position and market performance.

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