Short Interest in Boeing Jumped 13%

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Published: July 26, 2015 9:29 am

Last Updated: April 28, 2020 4:44 am

Short interest through July 15th was released on Friday after markets closed and we thought we’d take a look at what short sellers are thinking about The Boeing Co. (NYSE: BA). Short interest in Boeing jumped 12.9% compared with the June 30th reading, from 12.86 million shares short to 14.52 million. The new total represents about 2.1% of Boeing’s float and days to cover rose from 4 to 5.

The total is at its highest since the April 30th reporting date. Interestingly, if we look back at Boeing’s short interest history, it has risen in each two-week period that includes a company earnings report. That is likely due to the fact that Boeing’s earnings reports have included some piece of good news that offsets the not-so-good news in the reports. The bump in short interest probably indicates that some investors don’t think that the company can keep up its high-wire act.

Boeing has chosen to focus investors’ attention on its cash and free cash flow. The company has stuck by its outlook that cash flow in 2015 will be above $9 billion. In the first quarter of this year, cash flow was a tiny $88 million, but the second quarter brought the first half total to $3.39 billion. If Boeing can repeat that performance for the next two quarters it will have met its outlook.

In our look at how much a 787 costs we noted that Boeing continues to lose money on each of the planes it sells. The current per plane loss is estimated at around $26 million.

Since reporting second quarter results on July 22nd, five firms have issued notes on the company:

Jefferies reiterated its Buy rating and price target of $185
Bernstein reiterated its Buy rating and raised its price target from $190 to $196
Credit Suisse reiterated a Neutral rating and lowered its price target from $156 to $146.47
RBC Capital Markets reiterated a Sector Perform rating and raised its price target from $157 to $163
Deutsche Bank reiterated its Buy rating and maintained a price target of $175

Boeing’s stock closed at $144.06 on Friday, down 1.4%, in a 52-week range of $116.32 to $158.83. The consensus price target on the stock is $165.26 from 19 analysts polled by Thomson/First Call.

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