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Boeing was upgraded at Bank of America, which heralded the use of the company’s planes as a bargaining chip in the Trump administration’s trade deals. The firm upgraded the stock to buy from neutral and raised its price target to $260 from $185. “Boeing (BA) aircraft have emerged as the favored trade tool for the Trump Administration in recent trade deals,” wrote analyst Ronald Epstein in a Monday note. “We view those recent deals struck in the UK (32 aircraft orders), Qatar (210 aircraft orders), UAE (28 aircraft orders), and China (removing the ban on BA aircraft), as setting a precedent for future global trade negotiations, to BA’s benefit.” The new price target represents a 25% gain from Friday’s close. Boeing shares added about 1% in premarket trading following the call. Boeing at one point during the height of the trade turmoil in April broke below $130 a share. The stock is up 60% off those lows and now 17% higher this year as its planes began to be included in these trade deals. BA YTD mountain Boeing YTD President Donald Trump and his administration secured on May 8 a preliminary trade agreement with the U.K., and alongside that deal was a British Airways aircraft order worth nearly $13 billion to Boeing. As part of the trade war halt between the U.S. and China hatched last month, Boeing deliveries to China will restart this month. “Boeing’s backlog hasn’t been the lynch pin to our valuation,” the analyst said. “However, we do see the progress in stabilizing production, carve-outs alleviating FCF burn, and a renewed focus across the portfolio all performing in concert with the ‘favored trade mechanism’ status creating a buying opportunity.” Bank of America believes CEO Kelly Ortberg, who took over last August, is well on the way to breaking the company’s “doom loop.”
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