Boeing ‘Holds the Keys to the Future of US Tactical Aircraft,’ Says Bullish Analyst

Investors seem to have largely overlooked Boeing Co’s (NYSE:BA) F/A-XX program win, according to Bank of America Securities.

The Boeing Rating: Analyst Ronald Epstein reiterated a Buy rating and price target of $270.

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The Boeing Thesis: Boeing won two massive military contracts, namely the U.S. Air Force’s F-47 (NGAD) and the Navy’s F/A-XX sixth-generation fighter programs, Epstein said in the note.

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"Boeing now holds the keys to the future of U.S. tactical aircraft," he wrote.

Winning both these contracts gives the company control over the future of U.S. fighter jets and these two programs combined could be worth more than $200 billion, the analyst stated.

"This would’ve been a big deal for the most successful tactical aircraft business, let alone Boeing’s franchise, which was widely believed to be in a downward trajectory up to this point," he further noted.

When competitors Lockheed Martin Corp (NYSE:LMT) and Northrop Grumman Corp (NYSE:NOC) won similar mega-contracts, their stock stayed flat for three months but beat the market significantly after 12 months, gaining 13%-25%, Epstein said.

Boeing’s stock has shed around 16% so far this year. Based on historical patterns, the stock can be expected to "outperform through 2027 as F-47 and F/A-XX development progresses," he stated.

Software issues with the 737 Max 10 were cleared by the FAA as safe, removing immediate financial risks and delay worries, while strike risks are also resolved, the analyst noted.

"We haven’t been this bullish on Boeing in a very long time. BA is not just a commercial turnaround story; now it is also a tactical aircraft growth story," he further wrote.

BA Price Action: Shares of Boeing had declined by 0.03% to $190.36 at the time of publication on Monday.

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