This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Has the Moment Finally Arrived for Boeing Shares?

CHICAGO -- ( TheStreet) - Has the tide finally turned for shares of Boeing (BA - Get Report)?

The aircraft maker said Monday that it is now building 787s at the rate of five a month, a big step on the path to its stated goal of 10 a month by late 2013. So far, 83 aircraft have been built and 35 have been delivered. Ten days ago, United (UAL - Get Report) flew the first intra-U.S. 787 flight.

Now, Boeing shares are at their "moment of reckoning," said BB&T analyst Carter Leake, in an interview. "Having achieved the five per month rate, Boeing has much better information to better assess its ability to move down the learning curve. It's only when one is in a steady groove of production, with a minimum volume, that progress can really be determined."

So far, Leake said, the 787 has been "tracking reasonably well with regard to cost reduction, but all eyes will be on the incremental progress from five to ten per month. If they stumble, shares will come under pressure." Leake has a price target of $86 on the shares, which traded at $73.52, down 17 cents, shortly after noon on Tuesday.

Boeing, a Dow component and the largest U.S. exporter, has long been one of those companies that analysts consistently recommend. The logic is inescapable: The world is hungry for large jet aircraft, yet has only two manufacturers of large jet aircraft. Furthermore, in recent years Boeing has brought several new products, including newer versions of the popular 737 and 777, to market.

Yet shares have disappointed, largely because of delays in the 787 program but also because about half of Boeing revenues are derived from the troubled, politically sensitive defense sector.

Since Jan. 1, 2011, Boeing shares have risen 11% while the S&P 500 has risen 10%. This year, Boeing is down 1% while the S&P is up 10%. This month, Boeing shares have risen 4%, largely because the company raised its full-year guidance on Oct. 24. Since then, the consensus estimate among analysts surveyed by Thomson Reuters has risen to $5 per share from $4.73.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BA $149.60 0.00%
UAL $61.49 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs