The only short seller has flipped and raised the rating! Boeing Company (BA.US) is targeting a $16 billion cash flow and initiating a "$450 'double' stock price" route.

American Airlines Group Inc. saw a significant rise of over 8% in its share price on Monday, just before the surge in Boeing Company's (BA.US) stock price. The only bearish institution on Wall Street regarding Boeing's prospects, BNP Paribas, completely abandoned its bearish stance, upgrading its rating by two full levels and stating that there is a path for Boeing's stock price to more than double by 2030. Matthew Akers, an analyst at BNP Paribas, raised Boeing's rating from "underperform" to "outperform." He noted that market forecasts for the companys free cash flow have been "overly" downgraded; as Boeing, the sole manufacturer of aircraft, completes the certification of several important models and reduces its debt, the level of risk it faces in the coming year will significantly decrease. Boeing's stock surged about 8% on August 3, primarily due to a triple resonance of regulatory risk reduction, a cash flow inflection point, and a turnaround in seller expectations, rather than merely following the market rebound. Particularly noteworthy was the FAAs official certification of the 737 MAX 7, which ended nearly a decade of review and authorized Boeing to begin production of this model; this not only opened the delivery pathway for approximately 282 existing orders but also demonstrated to the market that the certification process between Boeing and regulators is returning to normal, thus increasing the credibility of the subsequent approvals for the MAX 10 and 777X as planned. The only short seller has now converted! Boeing emerges from the fog of the post-pandemic era, with a path to doubling its stock price at $450. In a research report sent to clients on Monday, Akers wrote, "The prolonged uncertainty surrounding Boeing in the post-COVID era is over. This higher expectation of fundamentals will likely enable its stock price to break free from the range of $150 to $250 that has constrained it since early 2020." He also believes that there is an optimistic path for Boeing's stock price to rise to $450 by the end of this decade. In addition to upgrading Boeing's stock rating by two full levels, he raised the companys benchmark price target to $300, the highest target price level among analysts covering Boeing. Analyst Peter Arment from Baird also set a $300 target price for Boeing. As of the close of the U.S. stock market on Monday in New York, Boeing's share price rose significantly by 8.03% to $233.490. The FAA announced on Monday that it has approved Boeing's 737 Max 7 aircraft, ending a certification process that has been delayed for nearly a decade. Since the beginning of the year, Boeing's stock price has accumulated a rise of about 4.2%, lagging behind the S&P 500 index, which has risen by 10.6%. As shown in the image above, Boeing's stock price has fluctuated within the $150 to $250 range repeatedlyBNP Paribas even estimates that by the end of this decade (2030), the stock price will soar to $450. With this rating upgrade, over 80% of Wall Street analysts tracking Boeing suggest a "buy" or "overweight" rating, while the remaining analysts recommend holding. Akers indicated that in the coming year, the certification of certain Max series and 777 series aircraft will significantly enhance the stability of Boeing's operating model. Meanwhile, he expects Boeing's net leverage to fall back to levels close to historical norms before the pandemic within the next year. The analyst wrote that the impact of non-recurring defense business expenses is expected to also significantly weaken, thereby reducing its long-term major drag on cash flow and helping investors refocus on the rapidly growing commercial aircraft business. Consequently, Akers has substantially raised his forecast for Boeing's free cash flow in 2027 to $7 billion. According to compiled data from institutions, analysts' average forecast is $6.23 billion. The analyst stated, "As the main factors dragging down cash flowR&D costs, customer compensation, and legacy defense project costsgradually fade, we expect free cash flow to reach approximately $16 billion by 2030." The analyst remarked, "Based on the current free cash flow yield of industrial companies, and adjusting for Boeing's historical average valuation discount, this suggests that its stock price could reach approximately $450 by 2030, about double the current level, and would set a new historical high since 2019." Regulatory risk reduction, a cash flow inflection point, and a turnaround in seller expectations As Boeings credibility in its transformation and regulatory positive effects have significantly improved, coupled with long-term revaluation logic beginning to receive cash flow validation, as described above, Boeing's stock surged about 8% on August 3, essentially due to the triple resonance of regulatory risk reduction, cash flow inflection point, and turnaround in seller expectations, with the most notable being the FAAs formal certification of the 737 MAX 7, which ended nearly a decade of scrutiny and authorized Boeing to begin production of the model. The quarterly earnings report released the previous week provided a fundamental foundation for this round of re-evaluation. Boeing's revenue grew by 8% year-on-year to $24.56 billion, with commercial aircraft deliveries increasing by 14% to 171 aircraft, the highest quarterly level since 2018; operating cash flow rose from $227 million to $1.364 billion, while free cash flow turned from a negative $200 million in the same period last year to a positive $631 million, and the order backlog reached a record $715 billion. Although the earnings report showed that Boeing's adjusted loss per share of $0.76 in the second quarter was worse than market expectations, and it incurred $280 million in expenses for the "Air Force One" project, the operating margin for commercial aircraft improved from -11.9% to -2.7%, and the defense business margin improved from -2.9% to -0.2%. These earnings data, overall, indicate that increased deliveries, stable production, and cost improvements are gradually releasing operational leverage. One of BNP Paribas's core bullish logic is that the market's downgrade of Boeing's future free cash flow has been excessive. As production rates for the 737 increase to 47 aircraft per month, with further increases planned to 52-57, along with the completion of MAX and 777 series certifications, and a gradual decline in R&D expenditures, customer compensation, and legacy defense project costs, analysts expect Boeing's free cash flow in 2027 to reach $7 billion, above the market average forecast of $6.23 billion, and potentially reach about $16 billion by 2030; based on the free cash flow yield valuation of industrial companies, this corresponds to a path for the stock price to rise to about $450. In other words, the market is re-pricing Boeing from a "long-term cash-consuming and regulatory crisis company" to a "delivery recovery, de-leveraging, and cash flow recovery company." The one-day drop in oil prices of 7%, the fall in U.S. Treasury yields, and the overall improvement in risk appetite serve as macro amplifiers for this upswing rather than core valuation pillars: the decrease in jet fuel costs can improve airline cash flows and reduce the risks of delayed deliveries and order cancellations. However, whether Boeing can consistently break through the $150 to $250 range that has persisted over the past few years still depends on the certification of the MAX 10 and 777X, the delivery of the supply chain and engines, the quality of the increased production of the 737, and whether fixed-price defense projects can stop incurring huge costs.