Credit Suisse upgrades Boeing to Neutral, raises price target to $200

As previously reported, Credit Suisse analyst Scott Deuschle upgraded Boeing to Neutral from Underperform with a price target of $200, up from $121, as several key parts of his original thesis are no longer defensible in light of the company’s improved operational performance. Key here are stronger aircraft deliveries-a trend which reduces the opportunity for downward estimate revisions, and instead creates upside opportunity, the analyst argues. Deuschle sees upside for Q4 free cash flow. Additionally, recent strong order activity helps defend out-year estimates and improves overall macro resilience, he adds. Finally, the analyst notes that China’s lifting of a ban on Australian coal imports may suggest increased policy flexibility, which may suggest higher probability of BA regaining market access. While he still sees risk that Boeing underperforms on supply chain challenges, softening orders/macro, or closer scrutiny on valuation, the overall risk/reward to that view appears less favorable.