Back to top

Image: Bigstock

Why Is Boeing (BA) Stock Surging Today?

Read MoreHide Full Article

Shares of Boeing (BA - Free Report) were up more than 4.5% in afternoon trading hours Wednesday, as investors reacted positively to Fed chair Jerome Powell’s speech and a pair of headlines involving the aerospace behemoth specifically.

U.S. stocks in general moved higher Wednesday afternoon on the back of Powell’s statement that interest rates are close to neutral. Wall Street interpreted this as an indication that the Fed is nearing the end of its rate hike cycle, which is a shift in tone from where the central bank stood just a few months ago.

Powell and the rest of his committee are expected to raise rates by 25 basis points in December. Investors in recent months have grown concerned that the Fed is raising rates too quickly, but now it appears some reprieve is on the horizon.

The S&P 500 jumped as much as 1.8% on the news. The Dow Jones Industrial Average added about 550 points, putting the blue chip index on track for its best trading session since late March.

Dow component Boeing saw added gains in the wake of a few headlines. Notably, a WSJ report said that investigators in Indonesia are now exploring whether maintenance issues were at fault for a deadly crash involving a Boeing 737 in October. It appears possible that human maintenance mistakes, rather than fundamental issues with the 737, contributed to the accident.

Investors also reacted favorably to the news that Boeing inked a new deal with Israel Aerospace Industries. Boeing will reportedly provide the state-owned aerospace company with contracts worth billions of shekel.

Boeing recently agreed to a “reciprocal procurement” with Israel that will see the Chicago-based company spend billions of dollars in the country if its wins certain defense contracts.

Analysts have been largely impressed with Boeing recently. The stock has seen nine positive revisions to its full-year and next-year EPS estimates within the last 60 days, with no negative revisions to any estimates coming in over that time.

Boeing is now expected to see earnings of $18.08 per share in 2019, which would represent growth of 20% from this year’s projected total. Full-year earnings growth is expected to reach 25% in 2018. Positive estimate revisions and upbeat earnings surprises in recent quarters have earned Boeing a Zacks Rank #2 (Buy).

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Boeing Company (BA) - free report >>

Published in