Boeing's 737 Max 7 model gets the green light from the US aviation authority FAA. At the same time, a Wall Street analyst turns on his heel and doubles his recommendation to buy, according to Bloomberg.
The stock is surging in New York.
The announcement is long-awaited for Boeing BA and comes after several years of testing since the first flight with the model was made eight years ago.
Boeing 737 Max models, which are more fuel-efficient than the Boeing 737, were involved in two fatal crashes in 2018 and 2019. A total of 346 people died.
In both cases, it was the Max 8 model. The fatalities involving the Max 8 model have affected the process of getting the Max 7 model approved.
Boeing Max planes have been grounded for several periods due to several incidents, not just the fatal accidents.
At the same time, things are happening on the analysis front, writes Bloomberg. BNP Paribas analyst Matthew Akers upgrades the stock from underperform to outperform, equivalent to sell to buy.
The justification is that the market's forecasts for the aircraft giant's free cash flow have been pushed down too much.
”"The era of post-pandemic uncertainty is over for Boeing. This clarity means that the stock is likely to break out of the $150-$250 trading range it has been stuck in since early 2020," the analysis states, setting a target price of $300.
By 2030, the analyst expects the stock to nearly double to $450.
At 7:40 p.m., Boeing shares rose more than 6 percent on Wall Street. Before the fatal accidents and the subsequent investigation into the company, the stock was trading at a high of $446. This means that today's price of around $229 is about 48 percent below the record level.
Source;DI:TT,SE
