Cowen bases the move on ‘fast-improving’ air traffic amid the 50% U.S. vaccination rate, which is boosting demand for planes.

DAN WEIL JUN 1, 2021 9:10 AM EDT

Boeing  (BA) – Get Report shares rose Tuesday after Cowen analyst Cai von Rumohr upgraded the giant jet maker to outperform from market perform, raising his price target to $290 from $240.

“Now that U.S has hit a 50% vaccination rate, air traffic/indicators are accelerating,” he said. “Fast improving air traffic is bolstering aircraft demand.”

Boeing recently traded at $252.09, up 2.05%. It has climbed 17% over the past six months amid enthusiasm for vaccines and economic recovery. That compares to a 16% gain for the S&P 500.

“Europe and China are likely to reach 50% [vaccination] in two and five months, respectively,” von Rumohr said. “And IATA [International Air Transport Association] now expects air traffic to top 2019’s level by 2023.”

Further, “While lingering FAA oversight and timing of China’s 737 MAX approval limit upside to 2021, 2022-24 look brighter,” he said. “Beyond traffic, aircraft demand is bolstered by (1) better economics of new planes, (2)low interest rates, and (3) lower carbon emissions.

Boeing suspended deliveries of its 787 Dreamliner once more on Friday while it seeks FAA approval for its program to solve quality problems.

“We are working to provide the FAA with additional information concerning the analysis and documentation associated with the verification work on undelivered 787s,” Boeing said in a statement.

A week before that came reports that Boeing is preparing to boost production of the 737 MAX.