After what can only be described as a turbulent year, Boeing Company (BA) closed out the fourth quarter with something that's been in short supply lately: clarity. Analysts are starting to see a credible path forward, and RBC Capital Markets just made that official with an upgraded price target and a thesis built around cash flow rather than hope.

RBC's Ken Herbert maintained his Outperform rating and bumped the price target from $265 to $275, framing Boeing's latest quarterly results as something of a credibility reset. The focus has shifted back to execution, which is exactly where it should be for a company trying to prove it can deliver both airplanes and dollars.

Boeing reported around $24 billion in fourth-quarter revenue, up 57% year over year, though that comparison benefits from a strike-impacted base period. More interesting is the roughly $400 million in free cash flow the company generated. That number came in better than expected and establishes a firmer starting point as Boeing heads into 2026.

The Cash Flow Story Gets Clearer

Herbert's main takeaway centers on improved transparency around 2026 free cash flow. Boeing reaffirmed a $1 billion to $3 billion FCF range for the year, which effectively anchors expectations around a $2 billion base case. But what really matters is that Boeing laid out the specific factors that bridge the gap between today's cash generation and a normalized $7 billion to $9 billion profile down the road.

That level of detail is important because it shifts the conversation from guesswork to execution. Herbert believes this framework bolsters confidence in Boeing's ability to hit $10 billion or more in mid-term free cash flow, and it means the stock should start trading more on actual performance than on conflicting assumptions.

Of course, there are headwinds in 2026. Herbert points to higher capital expenditures, impacts from the Spirit AeroSystems deal, ongoing 777X investment, a Department of Justice payment, pressure from customer advances and concessions, and continued losses in the Defense segment. But Boeing expects partial offsets from planned inventory reductions across the 737 MAX and 787 programs, which should gradually improve cash conversion.

Production Ramp and Delivery Targets

On the operational side, Boeing is targeting approximately 500 737 MAX and around 95 787 deliveries in 2026, implying roughly 10% delivery growth. The company exited the fourth quarter producing about 42 MAX aircraft per month, plans to reach 47 per month by mid-2026, and still aims for 52 per month in early 2027.

Boeing expects to deliver most of its remaining pre-2022 MAX inventory in the first quarter of 2026, with the exception of about 35 MAX-7 and MAX-10 aircraft. Certification for those variants remains targeted for the second half of 2026. For the 787, Boeing is holding steady at 8 per month and targeting 10 per month by the fourth quarter of 2026, with a longer-term goal in the mid-teens.

RBC's financial model projects $2.5 billion in free cash flow for 2026, climbing to $7 billion in 2027 and approximately $10 billion in 2028. The 777X program is the key swing factor in those projections. The firm's $275 price target applies a 22.5x multiple to that 2028 FCF estimate, though Herbert flags supply-chain risk as a potential constraint, especially as MAX production rates push beyond 47 aircraft per month.

Valuation and Investor Confidence

Herbert's $275 price target is based on applying a 22.5x multiple to Boeing's projected 2028 free cash flow of about $10 billion. That multiple is well above historical averages and higher than peers like Airbus SE (EADSY), but Herbert argues it's justified as Boeing returns to a more normal operating environment.

The thesis relies on Boeing hitting delivery and production milestones, which should drive stronger free cash flow and rebuild investor confidence. As Boeing's earnings profile improves, Herbert expects investors to increasingly value the stock on free cash flow rather than near-term earnings, supporting both the Outperform rating and the $275 target.

Boeing isn't getting love from RBC alone. UBS analyst Gavin Parsons reiterated a Buy rating and raised his price target to $285 from $275, while Citigroup analyst John Godyn also maintained a Buy rating and lifted his forecast to $290 from $270.

BA Price Action: Boeing shares were up 0.41% at $245.57 at the time of publication on Wednesday. The stock is approaching its 52-week high of $254.34.