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On Friday, Benchmark analyst reiterated a Buy rating on Boeing stock (NYSE:BA) with a steadfast price target of $215.00. During an investor conference, Boeing CEO Dave Calhoun outlined the company’s production plans for the 737-MAX, indicating a potential increase to 47 aircraft per month within the calendar year. This projection is seen as a substantial positive for Boeing’s cash flow and beneficial to the aerospace industry’s supply chain. With the stock trading at $205.41, near its 52-week high of $212.28, InvestingPro analysis suggests the stock is currently overvalued, despite its market capitalization of $154.9 billion and anticipated sales growth for the current year.
Boeing is nearing its goal of 38 737-MAX aircraft per month and plans to maintain this rate to ensure stable production. Following this phase, Boeing intends to seek Federal Aviation Administration (FAA) approval to boost production to 42 units monthly. The company has recently secured FAA consent to increase its 787 wide-body production from 5 to 7 per month, suggesting a similar trajectory for the 737-MAX. According to InvestingPro data, Boeing operates with a moderate debt level and maintains a current ratio of 1.23, indicating adequate liquidity to support its production expansion plans. Discover 10+ additional exclusive insights about Boeing’s financial health with an InvestingPro subscription.
The CEO emphasized that subsequent production hikes would likely occur in 5-month increments, with a minimum six-month interval between each. If the midyear target for 42 aircraft is achieved, Boeing could potentially reach a production rate of 47 per month by the year’s end. This ramp-up is crucial for Boeing’s cash flow and is expected to create a significant demand for components and materials within the supply chain.
The optimistic production forecast for the 737-MAX comes amidst prior skepticism regarding the timing of production increases. Boeing’s ability to meet these targets is pivotal for the company and its partners, including Raytheon Technologies (NYSE:RTX), Allegheny Technologies Incorporated (NYSE:ATI), Howmet Aerospace (HWM (BMV:HWM)), Carpenter Technology Corporation (NYSE:CRS), Kaiser Aluminum Corporation (NASDAQ:KALU), and Constellium (NYSE:CSTM), all of which maintain a Buy rating alongside Boeing.
In other recent news, Boeing’s financial and operational activities have drawn attention due to several key developments. The company plans to maintain its 737 MAX production at 38 planes per month, following a production limit set by the U.S. Federal Aviation Administration after an incident earlier this year. This decision comes as Boeing aims to improve its financial health after significant losses last year. Additionally, Boeing received a notable endorsement from William Blair, which reiterated an Outperform rating for the company. The firm highlighted Boeing’s advancements in its space division and the steady production increase of the 737 MAX as positive indicators.
Bernstein analysts also raised Boeing’s stock price target to $249, maintaining an Outperform rating, citing recent widebody orders and resumed deliveries to China as key growth factors. Meanwhile, Democratic Senators Elizabeth Warren and Richard Blumenthal have urged the U.S. Justice Department to prosecute Boeing over issues related to the 737 MAX crashes, emphasizing accountability for the company’s corporate culture. In a significant business move, Qatar Airways announced a substantial order for 160 Boeing 777X and 787 planes, marking the largest widebody deal between the companies. These recent developments reflect Boeing’s ongoing challenges and opportunities in the aerospace sector.
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