By Jordan Faigen
The Boeing Company (NYSE:BA)’s is in hot demand, reaching 2,000 orders for its next-generation single-aisle 737 MAX in record time.
Boeing in the News
The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More
This week, The Boeing Company (NYSE:BA) reached the 2,000 mark on its latest 737 model faster than any other of its planes in history. Boeing says, “this unprecedented demand is fueled by air traffic growth and the need for more fuel-efficient airplanes.” Airlines are eager to replace their planes with Boeing’s new model because this 737 will be 14% more fuel-efficient than today’s more efficient 737s. As of now, the over 2,000 orders that have been placed are valued at $209 billion based on list prices.
What Does This Mean For Boeing’s Stock
Jefferies analyst Howard Rubel reiterated his BUY Boeing rating and $165 price target noting, “the operating tempo of the business has taken a leap forward”. Before he attended The Boeing Company (NYSE:BA)’s business and strategic review meeting today, Rubel noted that, “productivity gains on the 777 liner are in the 3-5% per year range, and the 787 lines is starting to deliver at a predictable rate.” Rubel has a +20.7% average return on the stock, helping him earn an overall average return of +12.0% per recommendation and a 76% success rate of recommendations.
In addition to analysts, Seeking Alpha contributor, Investing Insight, recommended BUY Boeing, noting that the company has “great prospects ahead”. The Boeing Company (NYSE:BA) has orders pouring in from the US Navy, including a multibillion dollar deal for 47 fighter jets, and prospects from Iran. Investing Insight noted, “The company is already taking measures to build up its production capacity to keep up with its backlog. The world’s largest commercial plane maker expects to increase its production to deliver 715 to 725 planes in 2014 compared to 648 in 2013. Rival, Airbus, on the other hand hopes to produce 626 jets in 2014 the same it produced in 2013.” Investing Insight also pointed out that, “Boeing’s stock is a rare mix of safety, growth and dividends. The company has excessive production orders and is looking to increase its capacity to meet them. Global economic recovery is playing well in increasing air travel and boosting revenues for airlines and they are looking to invest in expanding fleets.” Investing Insight has a +2.9% average return on the stock, helping him earn an overall +8.5% average return per stock and a 60% success rate of recommendations.
The economy is picking up and taking to the skies. With plenty of orders on the way and production humming, The Boeing Company (NYSE:BA) appears to have success in its sights.
Jordan Faigen covers financial markets and the latest stock market news. She can be reached at Jordan@tipranks.com