Boeing Target Price Reaches Altitude Of $185 At Argus

Argus has raised its price target on Boeing Co BA shares to $185, representing a potential upside of 18 percent over December 13 close.

Positive Catalysts

Analyst John Eade has pointed out that Boeing continues to benefit from strengthening demand in the commercial aerospace sector, as customers upgrade to more fuel-efficient and technologically advanced aircraft.

The company has recently signed a $16.6 billion deal to supply jets to Iran. Boeing, which had been prohibited from doing business with Iran, has signed the deal only after the Obama Administration entered a nuclear accord with country.

Eade said commercial aerospace unit is the key long-term growth driver for Boeing, the aircraft backlog of which includes more than 5,600 aircraft orders, representing about seven years of production.

“[W]e believe that it has superior prospects due to its significant backlog and strong presence in the burgeoning commercial aerospace industry,” Eade wrote in a note.

Trump-Spurred Volatility

Meanwhile, Boeing shares have been volatile after President-elect Donald Trump has called out the Air Force One program for excessive costs and questioned the wisdom of the new Iran deal.

“A series of aggressive tariffs with trade partners could cost the company in future orders. We think that Boeing management – and the entire Aerospace & Defense industry — will ultimately work closely with the Trump economic team on these important and complicated issues,” Eade continued.

Eade, who has a Buy rating on Boeing shares, expects 2016 non-GAAP core EPS at $6.95 and 2017 EPS at $9.80.

At last check, shares of Boeing were down 0.61 percent to $155.70. Boeing shares have been strong performers over the past quarter, gaining 22 percent versus an advance of 7 percent for the S&P 500.