Aerospace stock Boeing (BA) got some good news today, of a sort, when criminal conspiracy charges were dropped against it following an incident in a Texas federal court. Though Boeing did not get off completely free, the result was significantly more manageable than criminal charges would have been. The move came with some controversy, and shareholders took their pound of flesh as well, sending Boeing shares down fractionally in Thursday afternoon’s trading.
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The case in question involved two 737 MAX jet crashes that killed 346 people. But a federal judge in Texas, Judge Reed O’Connor, granted the government’s call to dismiss the case. The original case alleged that Boeing had “deceived” government regulators about flight control systems involved in the case, but O’Connor ultimately dismissed the charge, noting the government did not act in bad faith, and that it provided reasons sufficient for dismissal.
Yet, with the deal to dismiss the charge, Boeing was obliged to pay an extra $1.1 billion in fines, compensation for the survivors’ families, and safety program augmentation, which we have seen Boeing pursue with great fervor over the last several months. Family members of the deceased, meanwhile, called for justice, with French family member Catherine Berthet pleading, “Do not allow Boeing to buy its freedom.”
So What’s With All the Sevens?
Have you ever wondered why there is no 637 in Boeing’s arsenal? Or why the next plane is the 777X as opposed to, say, the 837? As it turns out, there is a reason for this naming convention, which is all related to classes. Boeing’s original models were the 100 class, which was for “early models and biplanes,” reports note. The 200 class was for “single-wing aircraft.” The 300 and 400 were commercial aircraft with propellers. The 500 designation went to turbo-engine aircraft, and 600 went to missiles.
This convention carried on into the future, where in the 1950s, Boeing rolled out the first jet aircraft, the 707. And every other jet aircraft Boeing brought out carried the designation 7X7, where X was a relevant subclass number, like the 737 MAX, or the 777X. The only designation Boeing has not yet used is eight, which is, presumably, reserved for the next class of Boeing aircraft. Nine is kept for boats. Ending in a seven, meanwhile, is a “marketing decision” made for the sake of symmetry.
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 12 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 30.89% rally in its share price over the past year, the average BA price target of $257.25 per share implies 30.57% upside potential.
