UBS analyst Gavin Parsons said his $12.4 billion 2027 free cash flow estimate incorporates a $500 million tariff impact.

Boeing Co. (BA) shares rose over 1% on Friday morning after UBS raised its price target on the stock to $226 from $207 while keeping a ‘Buy’ rating on the shares.

The new price target implies a 17% upside from current levels. UBS’ upgrade follows the U.S. announcement of a trade deal with the U.K., which intends a 10% blanket tariff on imports from the U.K. The agreement included a major aircraft order worth $10 billion for Boeing.

According to a CNBC report, analyst Gavin Parsons wrote to clients that the airplane manufacturer has proactively addressed tariff risk.

Gavin highlighted that Boeing’s proactive approach included “communicating that they will prioritize supply chain continuity over price negotiations or changing production schedules and quantifying the direct cost impact as less than $500 million annually (with) full reciprocals and net of duty drawbacks.”

The analyst does not see tariffs materially impacting the company’s free cash flow recovery and noted that his $12.4 billion 2027 free cash flow estimate incorporates a $500 million tariff impact.

“We believe Boeing can fully absorb this impact and afford to support smaller suppliers financially should that supply chain support be needed, with higher MAX production the most significant driver of free cash flow in the model,” he said.

However, the analyst also noted that although supply chain issues have become less severe, they are unpredictable and could lead to another delivery halt.

“Depending on the aircraft model and duration, this could drive lower cash flow, lower production rates, share loss to Airbus, and more, both near-term and long-term,” he said.

On Thursday, according to a Reuters report, Boeing proposed delivering new Air Force One jets by 2027.

Boeing shares have gained over 12% in 2025 and 6% in the past 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<