Boeing Co (NYSE:BA) — On Nov. 10, I suggested the purchase of Boeing at $145 with a target of $175, then on Jan. 17 I adjusted the purchase price to $158 and the target to $180. On Dec. 13 it achieved $160 and, along with the market, the consolidation pattern suggested that another breakout for this, the world’s largest manufacturer of commercial jets, was likely.
That breakout occurred on Jan. 24 with a continuation gap from $160.93 to $163.94. On Feb. 2, the gap was closed when the stock retreated to its bullish support line, which is also the 20-day moving average line. For the last three sessions, BA has achieved a new closing high exhibiting very high momentum with solid accumulation.
And, as noted in my Nov. 10 Trade of the Day, in addition to commercial aircraft, BA stock is the second-largest maker of military weapons. Despite a supposed “dispute” with the new administration over the manufacture of Air Force One, it is apparent that a “deal” has been reached that is acceptable to both sides. Thus, Standard & Poor’s raised their EPS estimate to $9.56 in 2017, vs. $7.24 in 2016, and projects EPS of $10.32 in 2018.
They note that over the next several years, commercial aircraft demand is strong with 787 and 737 production ramp-ups. Operating EPS of $9.56 for 2017 earnings and cash returns to investors should rise due to stock repurchases and dividends. S&P’s 12-month target for BA was increased to $191 based on about 20X their 2017 EPS.
Boeing’s trend is decidedly bullish, with a well-defined 45-degree angle bull channel dominating the trend. The stock, as noted on the chart, broke to begin the formation of a channel in October, and has been supported by its 20- and 50-day moving averages throughout the advance. BA pays a dividend of $5.68 (dividend yield of 3.3%), which should attract those seeking long-term dividends from an investment-grade equity. Thus, continue to accumulate this large-cap growth stock at $173 with a trading target of $200.
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