Remember when Ryanair (RYAAY) came out with that unexpected boost to aerospace stock Boeing’s (BA) credibility, noting that they had never taken that many aircraft at once? Well, another boost just showed up from Norwegian, as the Scandinavian carrier came out and noted, “Boeing is really delivering aircraft these days.” That news proved solid enough for Boeing investors, too, who sent shares up fractionally in Thursday afternoon’s trading.
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Geir Karlsen, Norwegian’s chief executive, delivered the remark during the company’s third-quarter earnings briefing. So far, it has received 12 new 737 MAX 8 aircraft this year, and has just one plane left to receive. Moreover, it expects to receive that last straggler in the next few days as well, a development that, not so long ago, would have been thought nearly impossible.
Karlsen also noted, “It’s really nice to see that the production line in Boeing is working well these days, and this is what we expect also for the months and the years to come.”With Boeing recently cleared to increase its production on 737 MAX jets to 42 per month, it may well be able to get those kinds of results going as it works through its massive backlog and tries to take back its crown from immediate rival Airbus (EADSY).
No Movement in St. Louis
Meanwhile, the latest word around the St. Louis strike suggests that it is not going away any time soon. After two days of mediation, Boeing brought out a new offer to the union. But the union rebuffed it, and hard, declaring that it would not even bring it to the membership for a vote.
Naturally, Boeing pounced on that development, declaring, “Unfortunately, after talking for weeks about your democratic process, IAM leadership is refusing to allow you to vote on this offer and the chance to end the strike.” The union, meanwhile, called Boeing’s offer “insulting,” which apparently featured a fifth year to the contract that would come with no additional economic benefit. Boeing’s latest offer featured a $3,000 ratification bonus and $3,000 worth of Boeing stock October 31. Another $1,000 retention bonus would kick in in year four. But union members wanted $10,000 in ratification bonus and a 20% general wage increase over four years. Boeing offered a 24% increase over five years.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 14 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 39.56% rally in its share price over the past year, the average BA price target of $259.50 per share implies 18.68% upside potential.
