After a volatile year, Boeing Company (NYSE:BA) exited the fourth quarter on firmer footing, as analysts pointed to improving free cash flow visibility and a more defined path to normalization.
RBC Capital Markets took a constructive view of Boeing's fourth-quarter print, framing the update as a credibility reset that puts execution back at the center of the story.
Analyst Ken Herbert reiterated an Outperform rating and raised the price forecast to $275 from $265, citing improved FCF visibility and a clearer path to normalization.
Boeing reported ~$24 billion of fourth-quarter revenue, up 57% year over year off a strike-impacted comparison, and delivered ~$400 million of free cash flow, an outcome that came in better than expected and helps establish a firmer baseline heading into 2026.
2026 Free Cash Flow Visibility Strengthens
Herbert's key takeaway is the company's enhanced transparency regarding 2026 free cash flow. Boeing reaffirmed a $1 billion–$3 billion 2026 FCF range, effectively anchoring expectations around a ~$2 billion base case.
More importantly, Boeing outlined the specific "puts and takes" that bridge toward a normalized $7 billion–$9 billion cash profile, which Herbert believes improves confidence in $10 billion+ mid-term FCF potential. With the framework defined, he expects the stock to trade more on execution than on debate over assumptions.
Herbert also highlights the main 2026 cash headwinds: higher capex, impacts from the Spirit AeroSystems deal, continued 777X investment, a DoJ payment, and pressure from customer advances and concessions, alongside under-earnings in Defense. He sees partial offsets from the planned inventory wind-down across the 737 MAX and 787, which should improve cash conversion over time.
Production and Delivery Targets
On operations, Herbert says Boeing is targeting roughly 500 737 MAX and ~95 787 deliveries in 2026, implying about 10% delivery growth. Boeing exited the fourth quarter at roughly 42 MAX/month, plans to move to 47/month by mid-2026, and still targets 52/month in early 2027.
It expects to deliver most remaining pre-2022 MAX inventory in the first quarter of 2026, excluding about 35 MAX-7/-10 aircraft, while still aiming for MAX-7 and MAX-10 certification in the second half of 2026. For the 787, Boeing is holding 8/month and targeting 10/month by the fourth quarter of 2026, with a longer-term goal in the mid-teens.
RBC models $2.5 billion FCF in 2026, rising to $7 billion in 2027 and ~$10 billion in 2028, with 777X the key swing factor. The firm bases the $275 target on a 22.5x multiple of 2028 FCF, while flagging supply-chain risk, especially as MAX rates push beyond 47/month.
Valuation
The analyst set a $275 price target for Boeing based on applying a 22.5x multiple to the company's projected 2028 free cash flow of about $10 billion, reflecting confidence in its long-term production ramp and cash-generation potential.
While acknowledging that the multiple is well above historical averages and higher than peers such as Airbus SE (OTC:EADSY), the analyst said it is justified as Boeing moves back toward a normal operating environment.
The analyst expects the company to earn greater investor confidence as it hits delivery and production milestones, driving stronger free cash flow.
As Boeing's earnings profile improves, the analyst believes investors will increasingly value the stock on free cash flow rather than near-term earnings, supporting the Outperform rating and $275 price target.
Additionally, UBS analyst Gavin Parsons reiterated a Buy rating and raised his price forecast to $285 from $275, while Citigroup analyst John Godyn also maintained a Buy rating and raised his forecast to $290 from $270.
BA Price Action: Boeing shares were up 0.41% at $245.57 at the time of publication on Wednesday. The stock is approaching its 52-week high of $254.34, according to Benzinga Pro data.
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