Key Points
- The institutions are buying Boeing.
- The analyst's sentiment in Boeing is warming after showing a clear bottom.
- The price action is moving higher and may break to new highs following Q4 earnings release.
It’s been a turbulent few years for Boeing (NYSE: BA) between Dreamliner issues, the 737 Max grounding, and the pandemic. Now it looks like the times are changing for this company, and the institutions are booking a flight. The institutions own about 57% of the stock, and their holdings are growing.
The institutions have been buyers for the last 6 consecutive quarters, going on 7 with the start of the new year. This trend has the stock bottoming, moving higher, and quickly approaching a key resistance level. If the stock can get above that ceiling, the skies above should be clear enough to allow some additional upside for this stock.
There Is More Than 1 Tailwind For Boeing
Boeing has more than 1 tailwind to support it, and one of them is the analyst. The analyst's activity has been mixed over the past year but shows a clear bottom in sentiment that is helping push the price action higher. The consensus rating of 18 analysts is a Moderate Buy which has firmed over the past year. The price target is down in the 12-month comparison but up in the 3 and 1-month comparisons due to a string of positive commentaries.
The company has received at least 6 shout-outs since the first of 2023 alone, including 3 outright price target increases, 1 new target set above the consensus, and a downgrade to Equal Weight that includes a price target above the consensus. The bottom line, sell-siders are accumulating this stock, albeit the action is mixed. This may drive some volatility, but it should also provide upward pressure to prices.
“Going forward, we expect Boeing to trade on execution of its 2025/2026 aircraft production rate targets and free cash flow generation,” Kristine T. Liwag, an analyst at Morgan Stanley, said when she downgraded the stock to Equal Weight. “Despite the strong demand for aircraft, we see the supply chain as a bottleneck for further production/delivery increases, which is the key milestone for cash generation.”
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Boeing Reports Earnings At The End Of January
Boeing reports earnings at the end of January, with high expectations. The analysts expect a revenue surge of 22% sequentially and 32% YOY as deliveries ramp. Based on the latest delivery data, which shows them up 41% in December, there is a good chance the company will outperform smartly. The real takeaway is that the company may produce positive cash flow and profits this quarter and outperform the analysts’ $0.30 consensus target.
The analysts at Jefferies, which have the stock pegged at a Buy with a Target of $240 and more than $20 above the consensus, see Boeing supported by demand from within the aerospace and defense sectors, with aerospace spending supported by normalization and government budgets suggesting a C2023 acceleration in defense spending.
The Technical Outlook: Boeing Moves Up Off Its Bottom
Shares of Boeing took off from an institutional bottom in late 2022 and are quickly gaining altitude. The price action suggests upward movement within a trading range that may be capped at or near the $233 level. If that resistance point can be broken, the stock could increase to the $275 level or higher. If not, the price action could continue to move sideways until there is more clarity on 2023 business activity. That could come at the end of January when the company reports earnings.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Boeing (BA) | $149.29 | +4.1% | N/A | -11.57 | Moderate Buy | $190.37 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
