• BNP Paribas upgraded Boeing to ‘Outperform’ from ‘Underperform’ and lifted its price target.
• The FAA certified the long-delayed 737 MAX 7, allowing the airlines to begin preparing the aircraft for commercial service.
• Stocktwits traders said the analyst upgrade and MAX 7 approval strengthen Boeing’s turnaround narrative.

Boeing Co. (BA) shares gained nearly 7% on Monday, boosted by two positive developments. BNP Paribas delivered a rare two-notch rating reversal, upgrading the aerospace giant to ‘Outperform’ from ‘Underperform,’ while the Federal Aviation Administration (FAA) certified the long-delayed 737 MAX 7, removing a key regulatory hurdle for the aircraft.

BNP Paribas Turns Bullish On BA

BNP Paribas analyst Matthew Akers upgraded Boeing to ‘Outperform’ from ‘Underperform’ and raised his price target to $300 from $230, according to TheFly. The revised price target implies an upside of nearly 39% from Friday’s close.

The brokerage said the “post-COVID era of uncertainty” for Boeing is over, with the 737 MAX and 777X certifications expected to drive inventory liquidation and improve operational stability over the next year.

Akers wrote, “If it’s a Boeing, I’m going (to invest),” in a play on the long-running slogan about the company’s aircraft, according to Barron’s.

Barron’s also reported that Boeing is expected to generate about $2 billion in free cash flow this year and around $10 billion in 2028. The company generated nearly $14 billion in free cash flow in 2018.

FAA Certifies Long-Delayed 737 MAX 7

In a separate development, the FAA certified the Boeing 737 MAX 7 after nearly a decade of delays. The agency said the approval “reflects years of sustained work to resolve complex technical issues and complete a thorough review of the airplane's design and supporting safety analyses,” reported CNBC.

The FAA said it required the MAX 7 to incorporate key improvements, including updates to the flight-control software, flightcrew alerting system and a redesigned engine anti-ice system to prevent engine overheating.

The certification clears the way for airlines to begin introducing the aircraft into service, although it may take several months before the planes are added to schedules. Boeing is also awaiting FAA certification for the larger 737 MAX 10 and the 777X.

On Stocktwits, retail sentiment for BA remained ‘bullish,’ unchanged over the past 24 hours, while message volume was ‘high’ at the time of writing.

Retail traders pointed to both the rare analyst upgrade and the FAA’s certification of the 737 MAX 7 as positive developments for Boeing's recovery.

One retail trader called it “an important upgrade,” adding that the analyst had been a bear forever, and that it was “nice to have the turnaround recognized.”

Another trader said Boeing was “getting some positive momentum” after the FAA cleared the 737 MAX 7 certification, adding that the approval removes another hurdle for the company’s recovery story and could support future aircraft demand.

A third trader called the FAA clearance “a real catalyst,” saying investors will now focus on delivery momentum, certification confidence and backlog conversion, while watching whether the news leads to sustained order flow and improving sentiment.

BA shares have gained around 6% year to date.

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