Analysts at Swiss bank UBS have raised their 12-month price target for Boeing (NYSE: BA) shares to $515, more than 50% higher than their current level.
The bank also raised the airline manufacturer to a "buy" rating from its previous "neutral" stance.
"We believe Boeing shares carry the best upside in the sector," analyst Myles Walton said in a note Thursday after assuming the bank's coverage of the stock.
UBS said short-term concerns such as supplier issues that have slowed aircraft deliveries and potential trade tariff headwinds might result in pullbacks, but investors should see those as "attractive buying opportunities."
UBS said the primary driver for the crucial commercial plane segment will remain air traffic growth, which is currently running hotter that the 5% long-term trend.
The bank also noted that while 60% of Boeing's earnings and 70% of its cash comes from the sale of commercial airplanes, many investors were overlooking the potential upside to aftermarket service contracts.
Boeing is targeting $50 billion per annum in services contracts by 2025. UBS said while that is unlikely, evidence showed that services could be worth $35 to $40 billion to the company by the mid-2020s.
The UBS price target of $515 for Boeing shares puts it at the highest of 22 bank price targets published by Reuters. The mean figure among analysts is $410.
Shares in the aircraft giant took flight $10.61, or 3.2%, to $342.37 early Thursday.
