Aerospace and defense giant Boeing is the IBD Stock Of The Day for Monday. Boeing stock was added to SwingTrader on Thursday and shares flew into a buy zone on Monday.
The aircraft manufacturer reported narrower losses and improving sales for the past two quarters. Boeing's commercial unit booked solid revenue gains this year as travel demand and volume return to pre-pandemic levels.
The company made note of production delays for its 737 Max and 787 Dreamliner in mid-April and last week, respectively. However, analysts don't expect the snag to cause any major turbulence in Boeing's delivery schedule.
The 787 delays are "disappointing but should be surmountable," JPMorgan analyst Seth Seifman wrote in a research note last Wednesday.
The current stabilizer issue won't stop 787s from flying, and the Federal Aviation Administration won't have to approve any fix. So the aircraft can be delivered once they get cleared by Boeing.
Meanwhile, Boeing plans to ramp up production to overcome the fuselage fitting issues with the 737 Max, JPMorgan said. The bank maintained its overweight rating on BA stock with a 225 price target.
During its Q1 earnings report in late April, Boeing said it plans to deliver 38 jets per month for the rest of the year, up from the prior monthly target of 31 aircraft. Boeing targets 70 to 80 787 Dreamliner deliveries for the year, which shouldn't be affected by the recent delay, JPMorgan wrote.
The company maintained its full-year guidance following the results and expects to generate $3 billion to $5 billion in free cash flow, improving from $2.29 billion last year. For the year, FactSet analysts forecast a loss of $1.54 per share vs. a loss of $11.06 per share in 2022. Sales are expected to spike 16% to $77.46 billion.
Elsewhere, the Paris Air Show, scheduled from June 19 to June 25, takes off next week. The annual event is the world's largest air show and features the latest jets and technology from the aerospace and defense sectors. The weeklong exhibition also includes plenty of industry deal announcements and news.
Boeing Stock
BA stock is up 16.3% so far this year. Shares rose 2% Monday, edging narrowly above a 221.33 buy point for a flat base going back nearly four months. The current buy zone, which extends 5% beyond the buy point, stretches to 232.39.
The base is a second-stage pattern, which suggests the stock still has some room to run. SwingTrader added the stock on June 12, and pared back to a two-thirds position later that day.
Boeing stock has an 86 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Its relative strength line is off highs from the beginning of the year, and BA stock has a 92 RS Rating out of 99. However, the string of quarterly losses earn Boeing stock a meager 59 EPS Rating.
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