Boeing Investors Should Anticipate a Slow, Steady Recovery

The Covid-19 pandemic has been especially problematic for Boeing (NYSE:BA), which depends on a robust travel market. BA stock holders have been through a number of ups and downs, and now they have to assess the state of its recovery.

BA stock: image of a Boeing 737 max aircraft

Source: Marco Menezes / Shutterstock.com

Boeing’s progress has encountered some “speed bumps,” so to speak. The issues with the company’s 737 MAX jet planes have been particularly troublesome.

It’s understandable if BA stock holders are worried about Boeing’s plane delivery problems. There’s room for improvement in that area.

Still, the picture isn’t entirely bleak for Boeing. There may be a positive development or two on the horizon that can motivate investors to stay in the trade.

A Closer Look at BA Stock

I’ll be the first to admit that the BA stock bulls have a lot of catching up to do. The eventual target should be almost $440, which was the peak reached in February 2019.

In March of last year, the BA stock price fell below $100 in response to the Covid-19 pandemic. Anyone who got in at that price did quite well during the stock’s swift and powerful recovery.

Impressively, the bulls ran BA stock all the way up to a 52-week high of $278.57 on March 15, 2021. However, as of May 18, the share price has retraced to about $225.

Can BA stock recover to $275 and eventually reach $400-plus? It depends, to a large extent, on Boeing’s ability to deliver planes and generate revenues — a topic of debate among traders, no doubt.

Boeing’s Good and Bad Numbers

On May 11, Boeing released some statistics regarding the company’s aircraft deliveries.

Concerningly, in April 2021, Boeing delivered only four 737 MAX jet planes. There’s no way around it: that’s pretty bad. For perspective, in March, Boeing delivered 19 of those planes.

Remember, the 737 MAX is supposed to be a strong seller for Boeing. Investors were hopeful in December as Boeing, after two years, finally started delivering 737 MAX planes again.

But let’s turn our attention away from that aircraft model for a moment and focus on some other stats for the month of April:

  • Nine 787 Dreamliners delivered
  • Two 767’s and two 777-freighters delivered
  • 25 gross orders booked
  • Official backlog was 4,045 aircraft orders, down slightly from 4,054 in March

Boeing delivered a total of 17 airplanes in April. With that, the company delivered 94 aircraft during the first four months of 2021.

That’s actually not too bad. Plus, Boeing generated $3.749 billion in revenues during the first quarter of 2021 with an operating margin of 11.8%, which is respectable.

The Wiring Issue

Boeing’s delivery of the 737 MAX has been held back by electrical issues with the planes. But its predecessor, the 737 Classic series, is experiencing its own problems.

In a recent development, the Federal Aviation Administration (FAA) said it’s requiring U.S. operators to check for possible wire failures in 143 of the Classic series aircraft.

The FAA reports that this wiring issue has affected 1,041 of the 737-300, -400 and -500 Classic series airplanes globally.

Boeing stated that the company is “engaged in ongoing efforts to introduce safety and performance improvements across the fleet.”

Investors shouldn’t be too concerned about this, as the 737 Classic is an older generation of aircraft — over two decades old, in fact.

The newer 737 MAX and 737 NG models aren’t impacted by the FAA’s aforementioned safety checks. Therefore, there’s really no reason to panic-sell your Boeing shares.

BA Stock Can Still Make A Comeback

There will undoubtedly be more bumps on the path to Boeing’s recovery. The important thing to know is that Boeing is working diligently to fix its issues and get more of its aircraft off the ground.

And with that, there may be a runway to higher prices for BA stockholders.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. 


Article printed from InvestorPlace Media, https://investorplace.com/2021/05/ba-stock-investors-should-anticipate-a-slow-steady-recovery/.

©2021 InvestorPlace Media, LLC