Billionaire investor Dan Loeb’s Third Point LLC fund has Boeing Co (BA) listed among its top winners in May sending shares in the ailing planemaker up 13% on Wednesday.
The stock help up its gains on Wednesday even after Loeb told CNBC that he bought Boeing debt and not stock, reversing earlier market rumors that the fund entered into an equity position. The planemaker is joined by the likes of Walt Disney (DIS) and Burlington Stores Inc. on the investor’s list of top winners in May. The hedge fund returned 1.6% on its investments in May after 7.1% a month earlier.
In recent days, Boeing stock has benefited from a number of positive news. SMBC Aviation Capital announced this week that it has deferred, but not cancelled, the delivery of 68 of its 737 MAX jets until 2025. In addition, the struggling planemaker reached an agreement on a comprehensive package with German travel operator TUI to offset the financial impact of last year’s grounding of its 737 MAX jets.
Last week, Boeing said it restarted 737 MAX production at its factory in Renton, Washington, albeit at a low rate and is planning to gradually ramp up production this year.
Travel restrictions tied to the coronavirus pandemic have resulted in a deep cut in the number of commercial jets and services Boeing customers need over the next few years. As a result, Covid-19 has hit the planemaker very hard, with shares still down 48% since the beginning of the year.
The stock surged 13% to $173.16 at the close on Wednesday and rose another 3% in after-market trading. It is up 19% so far this week.
Wall Street analysts are still cautiously optimistic about the stock. Eight Buys, 11 Holds, and 1 Sell rating give Boeing a Moderate Buy analyst consensus, with the $161.61 average analyst price target reflecting 6.7% downside for Boeing shares. (See Boeing stock analysis on TipRanks).
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