11:44 AM EDT, 10/24/2024 (MT Newswires) -- Boeing ( BA ) must resolve the strike and begin increasing MAX production for both the company's and its suppliers' health, UBS said in a note Thursday.

Analysts, including Gavin Parsons, said that the union recently voted 64% to reject the latest proposal, compared with 95% for the original, so a better offer could close that gap and indicate improved cash flow generation, moving away from the current uncertainty about cash losses.

This resolution would boost confidence in the stock, suggesting that any potential equity issuance mentioned by the company would strengthen the balance sheet and give Boeing ( BA ) the flexibility to ramp up production steadily, while maintaining quality and stability, as emphasized by new Chief Executive Kelly Ortberg, the analysts said.

"Our near-term production and cash flow estimates have proven too optimistic, and we have significantly reduced both. But even with model inputs we view as conservative, we reach mid-teens+ free cash flow per share by 2027," the analysts said. "Provided demand for new aircraft remains robust, we believe that once near-term overhands are removed the market will begin to price in the strong long-term earnings potential of this duopoly business."

UBS also said that they now expect the strike to end in mid-November and project a $6.5 billion burn in Q4 and a $1.8 billion burn in 2025, before returning to positive cash flow of $5.8 billion in 2026.

UBS slashed its price target on Boeing ( BA ) to $195 from $215 while keeping its buy rating.

Price: 154.20, Change: -2.86, Percent Change: -1.82