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Boeing Swings to Profit in Q2; Shares Pop 4%
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Boeing Swings to Profit in Q2; Shares Pop 4%

Shares of Boeing (BA) jumped 4.2% to close at $231.57 on July 28 after the leader in aviation, aerospace, and defense technology swung to profit in Q2, as reported on July 28. The positive results were driven by a rise in commercial volume and reduced period costs, which are costs not involved in product costs. However, revenues lagged estimates.

Happily for Boeing’s investors, the company reported adjusted earnings of $0.40 per share in Q2, which compared favorably with the loss of $4.79 per share recorded in the same quarter last year. Adjusted earnings also beat analysts’ expectations of a loss of $0.72 per share.

At the same time, revenues rose 44% year-over-year to $17 billion, but still disappointed by missing analysts’ expectations of $17.78 billion.

Sector-wise, the company’s Commercial Airplanes revenue more than doubled on a year-over-year basis, while the Defense, Space & Security segment recorded 4% growth. Additionally, the Global Services unit posted a rise of 17% in revenues. (See Boeing stock charts on TipRanks)

Pandemic-related shutdowns undoubtedly affected Boeing’s numbers. To that end, Boeing CEO David Calhoun commented, “While our commercial market environment is improving, we’re closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry’s stability.”

Following the Q2 results, Cowen & Co. analyst Cai Rumohr was upbeat about the stock. He maintained a Buy rating and a price target of $290 (25.2% upside potential) on the stock.

Rumohr expressed his optimism about Boeing, saying, “Investors will focus on demand ‘color’ and the status of 787 and 737 production; but response going in likely will be positive.”

Rumohr’s report notwithstanding, the rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating. That’s based on 9 analysts suggesting a Buy and 9 analysts recommending a Hold. The average Boeing price target of $271.50 implies a 17.2% upside potential to current levels. Shares have increased 39.5% over the past year.

Bloggers are also enthusiastic about Boeing. TipRanks data shows that financial blogger opinions are 75% Bullish on BA, compared to a sector average of 69%.

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