Hard times ahead for Boeing Stock; 5-star analyst cuts price target | Zoom Fintech

It has been a roller coaster month for investors in the beleaguered airline Boeing (BA). To recap: The stock fell in the first three weeks of March to $ 95 per share, an incredible loss of 66%. However, last week’s rescue rally saw the stock price recover 70% of its value. Will volatility continue? Perhaps, because there is currently a large variable of unknowns regarding the future of the giant A&D. Nonetheless, Robert Spingarn of Credit Suisse reduced his price target on Boeing shares to $ 187 (from $ 367), which still implies an increase of around 23% from current levels. Despite the profit potential, it is not clear to the analyst how to actually recommend “buying” BA stocks, giving stocks only a “neutral” rating. (To see Spingarn’s track record, click here) Questions have been raised about Boeing’s financial health, following a $ 60 billion federal request for help to help its struggling ecosystem. Developments over the past week, along with the dividend cut and the company’s latest modeling, leave the 5-star analyst “reasonably confident in BA’s ability to contain liquidity / dilution risk in the short term.” Recovery of original equipment in 21+. The analyst notes that the recovery of revenue passenger-kilometers (RPK) in the first half of 21 could be affected by other COVID-19 mitigation measures. Longer term, in the second half of 21 and beyond, as well as a possible reduction in demand for business travel due to the growing popularity of video conferencing, the financial impact of the coronavirus on purchasing power consumer spending on leisure could have an additional impact on the RPK recovery. prices could translate into lower ticket prices, offering a counter-relief to the aforementioned issues, Spingarn reminds investors that there are other complications. “A small amount of oil improves the profitability of using older aircraft, which discourages the purchase of new tails. At the same time, MAX delays provide some airlines with a contractual loophole to cancel orders – a bad combination for BA. And if the demand for new aircraft could be questioned for years to come, the short term nevertheless promises an increase in supply with the return to service of MAX. The final BCA market could therefore face a double supply / demand shock which could lead to a prolonged period of indigestion and production rates “lower for longer”, ”the analyst said. based on 6 purchases, 13 holds and 1 sale. At $ 211, the average price target promises returns in the form of 39%, if the figure is met in the coming months. (See Boeing’s stock market analysis on TipRanks) More recent articles from Smarter Analyst:

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