Morgan Stanley adjusted its Boeing (NYSE: BA) stock price target by 10% on October 16, cutting it down from $250 to $225 while maintaining a positive “Buy” rating on the aviation company.
Previously, Morgan Stanley doubled down on the $250 price target a day ahead of the Society of Professional Engineering Employees in Aerospace (SPEEA) labor vote on October 1, which the bank called “a potential tactical buying opportunity.”
Analyst Kristine Liwag now lowers the forecast but notes that despite softer sentiment, demand is still intact across both commercial aerospace and defense. In addition, she notes that the team remains bullish on aerospace and defense heading into Q3 earnings.
The call was accompanied by a modest uptic in BA share prices, which climbed back to $191 by press time, although they remain down nearly 6% on the monthly and 16% on the year-to-date (YTD) chart.
BA stock price YTD chart. Source: Finbold
Wall Street weighs in on Boeing stock
The cut also arrives before Boeing’s third-quarter report scheduled for October 27, and it’s not an isolated incident, as RBC Capital also lowered its Boeing target from $265 to $235 just a day prior, which was a nearly identical reduction percentage-wise.
According to RBC, Boeing faces lingering uncertainty, as the defense budget is likely to remain a noticeable headwind, no matter if third-quarter orders are looking strong. Similarly, Bernstein lowered its Boeing price target to $278 from $298 on October 12, saying that labor, certification, and production issues persist.
While analyst comments suggest that there is no shortage of problems for Boeing to overcome, there are some potential growth catalysts. For example, the U.S. Air Force selected the company to develop the F-47, a next-generation fighter intended to succeed the F-22 Raptor. Among these developments, Barclays analyst Anthony Valentini initiated coverage on Boeing with a $300 BA price target last week, commenting that Boeing could be a potential beneficiary of emerging industrial shifts.
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