Investing.com -- UBS raised its 12-month price target on Boeing (NYSE:BA) to $226 from $207, citing a stronger free cash flow (FCF) outlook and improved clarity on tariffs.
“We revise our 12-month price target to $226 from $207, and now target 17.5X normalized 2027E discounted FCF from 16.0X previously,” UBS analysts wrote, pointing to “a higher market multiple … an improved tariff outlook and recent order activity.”
Despite lingering trade tensions and remaining 10% tariffs following the U.K. deal, UBS sees limited impact on Boeing’s recovery.
“We do not see tariffs materially impacting the FCF recovery,” analysts said. UBS continues to model $12.4 billion of free cash flow in 2027, incorporating a potential $500 million tariff hit.
UBS quantified the tariff exposure based on Boeing’s supply chain footprint. “We calculate a 2026 FCF impact of $453 million at full reciprocals and $275 million at current levels,” they wrote.
Japan and Italy are said to represent the largest exposure, each around 10%, while Canada and Mexico add 3% and France, the U.K., South Korea, and China contribute another 4% combined.
Boeing, UBS said, is “prioritizing supply chain continuity over price negotiations / changing production schedules” and has estimated the direct cost impact to be under $500 million annually under full reciprocal tariffs, net of duty drawbacks.
Critically, UBS believes Boeing can manage the hit and support suppliers if needed.
“We believe Boeing can fully absorb this impact and afford to support smaller suppliers financially should that supply chain support be needed, with higher MAX production the most significant driver of free cash flow in the model.”