Boeing Co (NYSE:BA) — On Nov. 10 I suggested the purchase of Boeing at $145 with a target of $175. On Dec. 13, it achieved $160 and, along with the market, is currently consolidating its gains. The consolidation pattern suggests that another breakout for this, the world’s largest manufacturer of commercial jets, is likely.
And, as noted in my Nov. 10 Trade of the Day, BA stock is also the second largest maker of military weapons. Despite a supposed “dispute” with the new administration over the manufacture of Air Force One, things are still looking good for BA.
Standard & Poor’s has raised their EPS estimate to $9.56 in 2017, up from $7.42 in 2016, noting that over the next several years, commercial aircraft demand is strong, with 787 and 737 production ramps. Cash returns to investors should rise due to stock repurchases and dividends. S&P’s 12-month target for BA is $172 based on 18X their 2018 EPS.
Boeing’s trend is decidedly bullish, with “ramp-ups” from the low last January at $105 to its current consolidation. The stock, as noted on the chart, is in a consolidation channel from $155 to $160. A break from the resistance line at $160 should result in a 20-point run to $180 spurred on by new commercial and defense orders as well as further clarification of returns from the F-35 program.
Moreover, BA pays a dividend of $5.68 for a dividend yield of 3.6%, which should attract those seeking long-term dividends from an investment-grade equity.
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