24/7 Wall St. Insights
- Despite recent troubles, analysts are optimistic about Boeing Co. (NYSE: BA) stock.
- There are at least two reasons to believe the company will recover.
- Also: Dividend legends to hold forever.
Despite a crippling strike among 33,000 Boeing Co. (NYSE: BA) machinists, which may have just ended, an FAA review of its quality control, a door plug that failed on a 737-9 Max in January, and a plan to sell $10 billion to raise needed cash, many Wall Street analysts rate it as a Strong Buy or Buy. Most also have price targets well above the current $155 a share.
According to Yahoo Finance, among the 25 analysts following Boeing this month, seven rate it as a Buy and seven as a Strong Buy. None rates it as Underperform or Sell. Its stock price is $150. The average analyst target is $200. Some analysts have a target of $275.
Perhaps these analysts believe that Boeing’s stock price will return to December’s level of $250, just before the company hit its series of catastrophes.
There are at least two reasons to believe Boeing will recover. One is that it has appointed Robert “Kelly” Ortberg as chief executive officer. He has a sterling record at a commercial aircraft parts supplier—Rockwell Collins. “This guy has a fantastic reputation and level of experience in the industry,” said Richard Aboulafia, managing director at AeroDynamic Advisory. “He has a reputation for listening and for letting people push back.”
Another reason to be optimistic about Boeing is its highly successful Global Services division. In the most recently reported quarter, its total revenue was $10 billion out of the company’s $33 billion total. The division had an operating profit of $1.8 billion, while Boeing had an operating loss of $1.2 billion. Boeing Global Services supplies commercial and military aircraft support, including parts and maintenance.
Analysts see something that gives them an idea of Boeing’s prospects, but it is hard to say exactly what that is.
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