After finishing 2022 on a solid note, the momentum in Boeing’s (NYSE:BA) business has carried over into 2023. The manufacturer of airplanes, satellites, rockets, rotorcraft, and missiles continues to see healthy orders and deliveries, implying strong growth ahead.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Boeing delivered 136 commercial airplanes in the second quarter. This represents an improvement from 130 deliveries in Q1. Further, it compared favorably to the 121 deliveries it reported in the prior-year quarter. On a year-to-date basis, Boeing delivered 266 airplanes, much higher than the 216 it delivered in the comparable prior-year period.
The recovery in the airline sector amid solid travel demand and an increase in defense spending due to the ongoing geopolitical issues in Europe continues to drive orders and deliveries for Boeing and its peers. For instance, Airbus (EADSY) is also benefitting from strong demand trends and has delivered 316 aircraft so far in 2023.
Strong Demand to Fuel Earnings Recovery
While Boeing benefits from solid demand across all of its product lines, its margins, and EPS remain under pressure due to abnormal expenses and higher R&D spending. During the Q1 conference call, BA’s management said that the company’s Q2 earnings could be in line with Q1 (it reported a loss of $1.27 a share) due to the abnormal cost.
Nonetheless, management expects EPS and free cash flows to improve as the year progresses, thanks to robust demand and an improving supply chain.
Goldman Sachs analyst Noah Poponak reiterated the Buy recommendation on BA stock following Q2 deliveries. In a note to investors dated July 11, the analyst said that he expects BA’s deliveries to accelerate in the coming months as “air travel recovers, more orders materialize, and supply chain headwinds ease.”
What is the Price Target for BA Stock?
Boeing stock has 12 Buy and five Hold recommendations for a Moderate Buy consensus rating. Further, BA stock has gained over 57% in one year. Thus, analysts’ price target of $238.35 implies a limited upside of 8.96%.
Investors should note that Peter Arment of Robert W. Baird is the most accurate analyst for BA stock, according to TipRanks. Copying Arment’s trades on BA stock and holding each position for one year could result in 62% of your transactions generating a profit, with an average return of 13.91% per trade.
