Wells Fargo says Boeing stock is still a 'bargain'

Boeing (NYSE: BA) is pushing higher this morning after a senior Wells Fargo analyst – Matthew Akers – issued a constructive note in favour of the aerospace giant.

On Wednesday, Akers initiated BA with a resounding “overweight” rating and a $250 price target, indicating potential upside of roughly 20% from current levels.

His bullish research report brings much-needed reprieve to Boeing stock that was otherwise down nearly 25% from its year-to-date high in late January.

Boeing stock to soar as company turns free cash flow positive

Akers’ bullish thesis is rooted in a “sharp free cash flow recovery” as Boeing moves past its current operational bottlenecks.

The company’s free cash flow sits at negative $1.88 billion for the trailing 12 months, but the Wells Fargo analyst continues to believe in a future where production normalizes.

Akers anchored his price target on a 20x multiple applied to the firm’s 2028 free cash flow forecast, arguing the multinational is currently trading at a “meaningful discount” to its industry peers.

According to him, as the 737 MAX and 787 Dreamliner output improves, the huge working capital currently tied up in unfinished inventory will unlock significant shareholder value – propelling BA shares back to their recent high.

Strong global demand remains a solid tailwind for BA shares

Long-term investors should consider investing in Boeing shares, given that the company’s fundamental backdrop seems to be stabilizing.

Recent developments signal a massive appetite for its wide-body aircraft; Korean Air committed to a $36.2 billion purchase of 103 aircraft, including the B777-9 and B787-10 models, with deliveries spanning through 2039.

Meanwhile, BA’s defense arm continues to provide a “steady floor” – as evidenced by a fresh $326 million contract from the US Department of War for CH-47F Block II helicopters.

While the uncertified 777X program remains a near-term drag on capital, Wells Fargo expects it to meaningfully reverse as the company hits a production cadence of 3-4 aircraft per month by 2030.

How to play Boeing Co at current levels?

BA stock remains attractive also because it has started hitting technical milestones as well.

On Wednesday, the company’s share price pushed past its 20-day moving average (MA), indicating shifting momentum in favour of the bulls. Meanwhile, options pricing continues to signal potential upside to nearly $232 within the next three months.

All in all, the narrative for Boeing is shifting from crisis management to “margin expansion”. CFO Jay Malave recently signaled that the commercial airplane unit – which suffered staggering losses of $2.1 billion in 2024 – is on a clear trajectory toward flat-to-positive margins by 2026.

This pivot is crucial for the “bargain” argument, as it suggests the worst of the cash burn is now in the rearview mirror. With a robust backlog and a leading position in an effective global duopoly, Boeing stands to benefit from a multi-year aerospace upcycle.

For investors willing to look past the immediate noise, Wells Fargo suggests the current valuation offers a rare entry point into a rebounding industrial icon.