Spare parts are spare parts, and a few good spare parts are worth having around. That is the conclusion reached at aerospace stock Boeing (BA), as it puts on what it calls a “comprehensive aircraft end-of-life program” to help build a stock of used parts. Boeing shareholders did not seem happy about this plan, though not by much, as share prices slipped fractionally in Tuesday afternoon’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Basically, Boeing wants to keep more parts in stock, and is willing to find them in aircraft about to be decommissioned. Boeing will start more aggressively managing both part-outs and tear-downs, and give a share of the revenue derived therein back to the consumer. The program is known as the Aircraft Recycling Program, and it gives Boeing a new income stream as well as the operator who turned in the plane near the end of its operating life anyway.
While not every used part will be viable, of course, Boeing is undertaking this move as a way to take some of the strain off its own supply chain. Instead of building excess parts and keeping them on hand for future replacement purchases, Boeing is trying to put some of the old parts that are still good back into service. Such a move actually dovetails well with Boeing’s plan to “upcycle” entire used aircraft, which we heard about previously.
Back to the Table, Day Two
New word has emerged about the St. Louis strike, meanwhile, which seems like it is at least going somewhere. Just where is unclear, however, as the two sides spent seven hours in negotiations yesterday, and are back at the table again today.
That is a far cry from Boeing’s previously-expressed stance of, roughly, “the offer is the offer and nothing will change because you’re already getting top of the market.” Interestingly, the union reported, Boeing was the one who requested mediation continue, which suggests that something is happening, and is sufficiently worthwhile to continue.
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 two Holds assigned in the past three months, as indicated by the graphic below. After a 35.61% rally in its share price over the past year, the average BA price target of $255.77 per share implies 18.11% upside potential.
