JP Morgan restores bullish outlook, Boeing shares up 1.6%

JP Morgan’s analyst Seth Seifman has upgraded his ratings of Boeing Co shares from Neutral to Buy,on expectations that China will soon allow the planemaker’s 737 MAX jet to return to its skies. Boeing’s shares were up 1.6% at $230.09 during premarket trading on Thursday after the analysts turned bullish on it.

In March 2020, it cut the stock by a notch, just as the pandemic began to take a toll on the aircraft business. After two deadly air crashes, Boeing’s 737 MAX had already been grounded for a year.

“MAX certification is just one element of Boeing’s China exposure, with another being future orders,” J.P. Morgan analyst Seth Seifman said in a research note to clients, adding that he estimates 445 deliveries of 737 MAX aircrafts in 2022, or 37 planes per month, compared with an average delivery of about 20 planes each in the last four months.

The target price of Boeing is increased from $260 to $275, representing a 21.3% increase in stock’s since the Wednesday close.

On Thursday, the firm upgraded the stock to “outperform,” claiming that the US planemaker can increase worldwide MAX jet deliveries to 52 per month by 2024, erasing Boeing’s excess 737 inventory by 2025.

China’s aviation regulator agreed earlier this week that design tweaks proposed by Boeing for its 737 MAX airliner might alleviate safety issues.

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