Boeing navigates tariff risks as UBS raises price target

In the United States on May 9, 2025, Boeing's stock saw a significant increase following the announcement of a trade deal between the U.S. and the United Kingdom. This deal includes a plan for the U.K. to purchase $10 billion worth of aircraft from Boeing, which is expected to bolster the American aerospace manufacturer significantly. The deal emerged amid a backdrop of fluctuating international trade relations, and investors reacted positively to the news, having already noted Boeing's substantial backlog of orders totaling $435 billion. UBS played a pivotal role in the growing optimism surrounding Boeing, as the investment bank raised its 12-month price target for the company's shares from $207 to $226. This upward revision, which suggests an 18% potential increase from the stock's previous close, was based on the sentiment that Boeing would successfully absorb the impacts of new tariffs outlined in the latest trade agreement. Analyst Gavin Parsons indicated that Boeing had proactively taken steps to mitigate tariff risks by ensuring supply chain continuity and addressing financial strains on its suppliers, thereby fostering confidence among investors and analysts alike. Despite the positive outlook, Parsons identified several risks that could affect Boeing's performance moving forward. Weaker air travel demand remains a concern, along with unpredictable supply chain issues that could hinder delivery schedules. Such delays could not only lower cash flow but could also allow Boeing's competitors, particularly Airbus, to gain market share. Nevertheless, Parsons noted that the improvements seen in Boeing's supply chain over time could help alleviate some of these concerns. Additionally, the recent resurgence in the demand for commercial aircraft, highlighted by the U.K.'s order for 32 new Boeing 787-10 long-haul aircraft, reinforces the notion that Boeing is on a path to recovery. Investors, recognizing the potential for significant growth in Boeing's financial forecasts, are eager to capitalize on this momentum even amid uncertainties in the global market. Overall, the combination of incoming orders and positive analyst sentiment reflects a strong belief in Boeing's recovery trajectory.