Is Boeing Stock Going to $300? 1 Wall Street Analyst Thinks So.

If you believe the pundits, Boeing (BA -0.80%), a company and stock that has been in the doghouse of late, is poised to soar again. One analyst tracking the aerospace giant predicts that it will regain significant altitude over the next year or so. She’s set a price target on the shares that is almost 60% above their present level.

Boeing stock is a low-flying bargain

Boeing just hasn’t done well over these past few years. It was badly affected by the coronavirus pandemic earlier this decade, as air travel declined precipitously for obvious reasons, and earlier this year had an embarrassing accident when a door plug on one of its 737-9 MAX planes detached during a flight. A subsequent quality control investigation by the Federal Aviation Administration found production shortcomings with the company.

None of this prevented Jefferies analyst Sheila Kahyaoglu from reiterating her buy recommendation on the stock at the end of March. She also maintained her 12-month price target of $300, which is rather a bold stance given that it’s 59.5% higher than the aerospace company’s current stock price.

The root of Kahyaoglu’s optimism is Boeing’s 787 Dreamliner model. In her latest research note on the company she wrote that the plane “is set up favorably given positioning in an expanding widebody market.” To her, the 787 alone could generate $2.6 billion in free cash flow (FCF) as soon as 2026.

Strong headwinds

The analyst is right to wax bullish on the 787’s prospects, given the robust growth of the travel industry since the coronavirus pandemic, and the resulting consumer interest in taking long-haul trips. Yet Boeing has suffered reputational damage that will take some time to overcome, and quality control issues often are not quick or easy to fix either. Kahyaoglu’s ambitious price target might just be too ambitious for this stock over a one-year timeframe.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool has a disclosure policy.

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