Boeing labor issue could be final milestone before news turns more constructive: Read By Investing.com

Citi analysts said in a note Monday that Boeing’s (NYSE: ) ongoing labor negotiations could be one of the last hurdles the company needs to clear before the news turns more positive.

“Boeing has had a tough 2019. Crashes, a pandemic and subsequent decline in experienced labor, underpriced defense programs, a door blowout followed by increased regulatory oversight, a guilty plea, stranded astronauts and now a strike,” the bank wrote.

However, Citi remains optimistic, stating that “it’s always darkest before the dawn.”

Citi analysts believe that the current strike, although disruptive, is unlikely to be prolonged.

“We don’t expect it to be a long, drawn-out process given the economic incentives on both sides,” Citi noted. Once resolved, Boeing is expected to overcome these hurdles and enter a more favorable news cycle.

Despite the challenges, Citi maintains its Buy rating on Boeing, with a price target of $224. These highlight Boeing’s strong positioning in the commercial aerospace market, where demand extends into the 2030s, as well as robust defense demand driven by geopolitical factors.

Long-term visibility combined with improved execution is seen as offering significant opportunities for the company and its investors.

Citi views the labor strike as a temporary disruption similar to the supply chain issues that have plagued the industry in recent years.

As these issues are resolved, analysts believe the focus will likely shift to improving productivity, offsetting inventories, generating cash and reducing debt.

The bank said: “We do not believe the company’s business model is structurally affected or different from pre-2019.”

With a new CEO and management team committed to overcoming these challenges, analysts believe Boeing is poised to see better days ahead as it navigates the final hurdles in its recovery journey.