Two months ago, on May 17, the U.S. government said it would investigate a claim by Boeing Co. (BA) that Canada illegally subsidized sales of its C-Series aircraft to Delta Air Lines Inc (DAL) .  Immediately, Canada warned that it could cancel its planned purchase of 18 Super Hornet fighter jets.

Investors dumped Boeing stock. Shares closed May 16 at $182.70. The next day they traded as low as $175.40, down 4%.

That turned out to be a major buying opportunity because Boeing shares have been on a tear ever since.

While the Dow Jones Industrial Average average has gained 3.1% since the May 16 close, Boeing shares have gained 14%. Year to date, the Dow has risen 9.49% while shares in Boeing, the No. 1 performer on the Dow, have jumped 34%.

On Friday, JPMorgan analyst Seth Seifman upgraded shares to overweight from neutral. He has a price target of $240.

Boeing on Tuesday was down 0.3% to $208.30.

"The stock has outperformed {the Dow} by 25% YTD and there is only 15% upside to our Dec 2018 price target of $240, yet we still believe the upgrade is warranted in a market where outsize upside is elusive," he wrote.

Seifman listed five reasons for the upgrade.

"First, BA is among the stocks best positioned to benefit from positive aero fundamentals," he said. "Second, BA is consciously trying to shape the industry to capture more value for itself, which could mean strong relative performance and potential upside to estimates.

"Third, our {free cash flow} and {earnings per share} estimates are moderately above consensus. Fourth, management has been proactive in addressing challenges the past 18 months. And finally, while sentiment has improved, BA has received very few upgrades the past year and holder data shows few active investors establishing or adding to large positions."

Seifman said his $240 price target values Boeing at 20 times his 2019 earnings per share estimate of $12.30, compared with consensus is $11.55. However, he said, Boeing currently trades at 20 times its 2018 consensus. "Investor fears of a downturn and the impact on valuation are the biggest risk," he said.

The assumptions, Seifman said,  are that airline traffic growth remains solid, although closer to the long-term annual average of 5% than to the recent post-recession 8%; that the market can absorb increased narrowbody production, with Boeing raising 737 production to 57 a month in 2019; and that widebody demand remains at current levels.

Broader risks could include recession, a decline in global access to capital, oil price variations and a slowdown in China, which accounts for 25% of all Boeing deliveries, he said.

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