"Boeing Stoke" prices rise as airlines return to air
Commercial aviation giant Boeing is starting to look like Tesla, the pioneer of electric cars, on one side: there is a growing disagreement among analysts over share value.
On Monday morning, Seaport Global launched Boeing shares (index: BA) equivalent to the purchase rating. Target analyst Rich Safran is $ 277 a share price, the highest on Wall Street. Another bull, Goldman Sachs analyst, Noah Bubonak, raised the target price for Boeing's share from $ 209 to $ 238 a share Sunday evening ....
As the stock market rallied on Friday, Boeing flew higher. While the S&P 500 rose 2.62%, Boeing (NYSE: BA) closed at $ 205.43, up by 11.5%.
Boeing is still down 37% so far, and Boeing has recovered in recent months. The stock performance for one month + 59.36%.
In pre-market trading on Monday, the stock rose again, thanks to upbeat Wall Street analysts' reports. The space giant traded at about $ 222.
Welcome any good news
Analysts said British Airways shares were bolstered by some welcome news from the US Airways industry. American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have recorded an increase in air travel, as Americans slowly return to their old habits.
Of course, the epidemic of the coronavirus has not ended, and airlines are still far below normal passenger levels. As of Monday morning, there were over 1.9 million confirmed cases in the U.S. and over 110,000 deaths. In some parts of the country, the number of cases increased in the past two weeks.
On Sunday, the Transportation Security Administration (TSA) examined the largest number of passengers it has seen in months, 440,000. But on the same date a year ago, TSA examined 2.7 million. In April, there were a few days when TSA saw fewer than 100,000 passengers.
However, Americans often venture into adventure. In April and May, American Airlines flew only about 20% of its regular domestic schedule. But by July, the airline expects to reach 55% of normal.
By the last week of May, American Airlines was seeing about 110,000 passengers per day, up from an average of 32,000 in April. The airline promotes travel in the summer, offering to double the number of frequent flyer miles booked for flights booked in June. In another sign of normalcy, America reopened some of the Admirals Club airport lounges.
"We are seeing a slow but steady rise in domestic demand," said Vasu Raja, senior vice president of American Airlines. "After a careful review of the data, we put together the July schedule to suit it."
Delta expects to carry 65,000 passengers per day, more than double the April figure. The airline plans to double the number of scheduled flights in May by July.
But it's not all good news. Delta also announced last week that it would stop flying to 11 US cities indefinitely, including Aspen, Colorado, Flint, Michigan and Santa Barbara, California.
Bullish analysts
Boeing was generally raised with the market. But a new analyst rating indicates a core behind Boeing's positive performance. Seaport Global Securities began coverage on Monday of the Chicago-based company, calling it a purchase.
Seaport set Boeing's target price at $ 277. Average price target for 12 months is much lower, at $ 235.20. There are currently nine Purchase Reviews, 14 Suspensions, and Three Sales.
Goldman Sachs also reiterated its previous rating for Boeing. Goldman analysts raised the target price to $ 238. Over the weekend, Quinn repeated the rating.
Seaport Global said in its commentary that the risks associated with the epidemic are now priced in stocks, which received a major blow earlier in the year. Already experiencing a 737 MAX crisis, Boeing stumbled when flight stopped. Several investors, including Warren Buffett, dumped airline stocks.
In the midst of the crisis, Boeing raised $ 25 billion by issuing investment-grade bonds so that it could avoid seeking help from a government rescue fund created due to the devastating impact of COVID-19 on the economy. The federal bailout program would have led the government to buy a stake in the company.
Boeing recently resumed production of the 737 MAX, according to a reduced schedule. The model was brought out of service after two fatal accidents in 2018 and 2019. After taking steps to fix technical issues with the 737 Max, Boeing assumes that the Federal Aviation Administration will evacuate the plane to fly again soon.
Airbus also soaring
Boeing, Boeing's main competitor, also thrived in the Netherlands. Airbus shares rose 11.5% on Friday.
Neither company is getting orders for new aircraft at this time. But investors seem to think the travel will recover, and airlines will buy the planes again. The COVID-19 pandemic is still a major unknown here.
Both Airbus and Boeing also have large government contracts, which are more recession-proof. Last year, defense accounted for 45% of Boeing's business. In the company's recent earnings report, CEO David Calhoun expected the defense sector to outperform the commercial aviation sector in 2020.