1 Wall Street Analysts Think Boeing Shares Will Rise to $209; Should You Sell?

Aerospace giantsBoeing (NYSE: BA)'s investors received more bad news recently. An analyst at Melius Research downgraded the stock from a "buy" rating to a "hold" rating, while maintaining a $209 price target on the stock. While there is no consensus on the meaning of these ratings, I believe most investors should interpret the "hold" rating as a "sell."

Boeing has problems in many areas.

Boeing has no shortage of problems, and Melius analysts believe that Boeing may not be able to achieve its long-held goal of $10 billion in free cash flow between 2025 and 2026. This goal was proposed by Boeing at its November 2022 "Investor Day" presentation, and Koon's management may believe that this goal is so far off that it will inevitably be met.

A little more than a year later, the company's well-documented quality control problems led to a slowdown in production of the Boeing 737.

It is worth noting that while commercial airplanes are attracting attention, Boeing's defense business is also facing the challenge of expenses and cost overruns. In October of this year, Brian West, Simmons' chief financial officer, admitted that the defense business was performing below expectations and recovery was not as fast as expected. He also mentioned that the defense business' contribution to the $10 billion free cash flow target may not be as large as originally expected.

Can Boeing realize the FCF target by the end of 2026?

Boeing's 737 production problems have caused analysts to lower their forecasts. The consensus view is that Boeing will reach its $10 billion target by 2026.

That's not to say that Boeing stock doesn't hold good value prospects for patient investors. Boeing still has a backlog of orders for nearly 5,600 airplanes, including 4,300 Boeing 737s. Its main competitorsAirbus) is also trying to increase production. Moreover, $10 billion represents about 8.7% of its pre-market capitalization, which is a good reason to buy the stock even if the target is realized after 2026. In fact, Melius' target price suggests an upside of 11.5% over the next 12 months.

Should you invest $1,000 in Boeing now?

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Lee Samaha does not hold any of the shares mentioned above.The Motley Fool does not hold any of the shares mentioned above.The Motley Fool has a disclosure policy.

1 Wall Street Analyst Thinks Boeing Shares Will Rise to $209; Should You Sell? This post was originally published by The Motley Fool.