Boeing shares are approaching “cruising altitude” after taking off at the tail end of 2022, according to Morgan Stanley. Analyst Kristine Liwag downgraded the aerospace and defense stock to equal weight from overweight, saying in a note to clients Tuesday that the 65% surge in the shares since the start of the fourth quarter puts them in line with their fair value. “We see a balanced risk reward as the majority of the near- and medium-term positive catalysts for the stock have been realized,” she wrote. “Going forward, we expect Boeing to trade on execution of its 2025/2026 aircraft production rate targets and free cash flow generation.” While demand for Boeing’s aircraft is holding up, Liwag expects supply chain bottlenecks to persist at least through the first half of the year. These problems should weigh on the company near term and will likely impact its ability to generate cash, she said. Despite the downgrade, Liwag expects Boeing to post its first positive free cash flow year in 2022 after burning through funds amid regulatory issues related to its 737 Max and 787 models. She upped her price target on the shares to $220 from $213, representing a little over 5% upside from Monday’s close. The stock shed a little more than 5% in 2022. The shares dipped 2.7% before the bell. — CNBC’s Michael Bloom contributed reporting