UBS analysts see further upside in Boeing's (NYSE:BA) valuation, raising its price target for the stock to $315 from $275 per share in a note Friday, reiterating a Buy rating.
Analysts told investors that following the 23% rise in Boeing's shares over the past month, there is "further re-rate potential."
"Strong November deliveries indicate supply chain improvement on the MAX, and we believe the market increasingly focus on record new aircraft demand and backlogs," they stated.
"At $256, shares trade at 15X Boeing's $10bn free cash flow guidance, matching the long-term average - but at a 15% discount to the historical relative (given the higher S&P500 multiple)," the analysts added.
Furthermore, the investment bank also sees upside to the $10 billion with "multiple years of growth beyond." Absent further significant supply chain setbacks, UBS expects the stock to "increasingly trade on normalized free cash flow."
Boeing shares have added to their recent run higher on Friday, climbing more than 1% to a high of $260.73 in early trading.