01:03 PM EDT, 03/24/2025 (MT Newswires) -- Boeing's ( BA ) first-half aircraft deliveries are expected to benefit from higher inventory levels, while management's recent positive comments around free cash flow prompted RBC Capital Markets to raise its FCF estimates for the plane maker.

Last week, Chief Financial Officer Brian West told analysts during a conference that Boeing's ( BA ) cash outflow is expected to be smaller in the first quarter than previously projected, according to a FactSet transcript. For the 2024 full year, the aircraft manufacturer's free cash flow stood at negative $14.31 billion.

The company has delivered a combined 89 aircrafts in the first two months of the year, data on its website showed. Boeing ( BA ) has exceeded delivery expectations through the first two months of the year, RBC analyst Ken Herbert said. It has distributed 23 planes in March so far, according to the RBC report, which cited data from Cirium. Herbert projects the stronger-than-expected year-to-date delivery trends to carry into the second quarter.

RBC now estimates Boeing's ( BA ) full-year 2025 free cash flow to improve by about $500 million to a negative $4.27 billion balance, mainly reflecting robust deliveries of the company's Max jets and 787 Dreamliners. RBC is betting on positive FCF in 2026.

The company will likely be able to produce 38 Max planes per month by the third quarter, supported by sufficient inventory levels, according to the brokerage.

RBC maintained its outperform rating on Boeing's ( BA ) stock and a $200 price target. Shares of the aircraft manufacturer rose 2.6% in midday trading.

"While the stock has come back to now be up slightly for the year, after testing its 2024 lows in February, we believe investor confidence is high in the company's ability to outperform expectations for (first-half) deliveries," Herbert wrote. The short-term set up for Boeing ( BA ) "remains favorable," though RBC continues to see risks to its planned commercial production increases for the 2026 to 2028 period as factors such as tariffs and fastener capacity pose challenges to the aerospace outlook.

During last week's conference, West said the plane maker doesn't forecast a near-term material impact from tariffs on the input side of the supply chain, because of the volume of inventory purchased before the duties were proposed. About 80% of Boeing's ( BA ) commercial spending and more than 90% of its defense spending in its supply chain is US-based, while "nearly all of the aluminum and steel" that it buys is US sourced, West said at the time.

The tariff risk to Boeing ( BA ) is manageable for now, but a souring of trade relations between the US and its key partners could put the company in a less favorable position to gain international orders, according to RBC. "While we believe potentially weaker order activity could be a near-term sentiment headwind, the backlog today should support the current production ramp," Herbert said.

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