Two analysts boost Boeing price target to $100
ASSOCIATED PRESS March 13, 2013 2:47PM
FILE - In this Jan. 7, 2013, file photo, a Japan Airlines Boeing 787 jet aircraft is surrounded by emergency vehicles while parked at a terminal E gate at Logan International Airport in Boston as a fire chief looks into the cargo hold. Federal regulators have approved a Boeing plan to redesign the fire-prone lithium-ion batteries, although extensive testing will be needed before the planes can fly passengers again. The Federal Aviation Administration said Tuesday, March 12, 2013, the plan includes a redesign of the internal battery components to minimize the possibility of short-circuiting, better insulation of the battery's eight cells and the addition of a new containment and venting system.(AP Photo/Stephan Savoia)
Updated: March 13, 2013 4:58PM
The news that Boeing could be getting closer to getting its grounded 787 back in the air again prompted several analysts to raise their price targets on the company’s stock on Wednesday.
The world’s 787s have been been grounded for almost two months after a battery fire on one plane and a smoldering battery on a second one. Investigators have been trying to figure out what caused the problems. Boeing has proposed a fix, including more insulation and a box meant to contain a fire. On Tuesday, the Federal Aviation Administration said Boeing could test the fix. Boeing said that passing the tests will put the 787 back in the air.
This appears to be what investors were hoping for. Before the fire on Jan. 7, Boeing shares had closed at $77.69. They closed as low as $73.65 three weeks later, after the planes had been grounded. As anticipation grew for a battery fix, the shares have been rising faster than the recent runup in the Dow Jones industrial average, which includes Boeing Co.
On Wednesday, shares gained 59 cents, or 07. percent, closing at $84.75.
Analysts at Sterne Agee and Stifel both raised their price targets for Boeing to $100.
The apparent progress on the 787 was one factor. Another was the expectation that Irish discount airline Ryanair will soon announce an order for some 200 Boeing 737s.
Also, Boeing is beginning share buybacks that could retire 5 percent of the stock in the next year based on previous practices, wrote analysts Peter Arment and Josh W. Sullivan at Sterne Agee. Their previous share price target had been $87.
Stifel analyst Stephen E. Levenson said there’s a risk that estimates for Boeing’s 2013 earnings per share could decline because of the 787 problems, “but profitability and cash flow should improve substantially in 2014,” he wrote. His previous share price target had been $85.