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Why Is Boeing Rallying in Pre-Market Trade Today?

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Boeing’s signing of new orders at the Farnborough International Air Show has boosted investors’ confidence in its stock.

Aerospace giant Boeing (NYSE: BA) has been delighting its investors with a streak of new orders at the Farnborough International Air Show. The deals are grabbing investors’ attention, and the U.S. planemaker rallied around 1.5%, at the time of writing, in the pre-market trading session on Tuesday.

On July 18, the first day of the Farnborough International Air Show, Boeing announced that it bagged an order from Delta Air Lines (DAL) for 100 Boeing 737 MAX 10 jets, valuing about $13.5 billion. Delta will also have an option to buy additional 30 jets.

The successful completion of the deal will need regulatory approvals for the jet, which has been grounded for the last 20 months after two crashes that killed 346 people. 

Boeing is trying to win approval for its 737 MAX 10, the latest and longest variant of the 737 MAX jets category, by the end of this year.

The world’s largest aerospace company has won another order from Japanese airline ANA Holdings for 20 new 737 Max 8 jets, with an option for another 10, according to a report by Puget Sound Business Journal. The deal also includes the conversion of an order to the freighter model from two previous 777X passenger jets.

According to a Bloomberg report, Boeing has also cracked a deal with private-equity firm 777 Partners on day two of the air show. 777 Partners has booked orders and commitments for 60 737-8 narrowbodies and the higher-capacity 737-8-200 model.

“…of which 30 aircraft are firm and the remainder commitments will be divided among the company’s low-cost assets, which include Flair, Australia’s Bonza, as well as a third carrier that will be revealed soon,” said 777 Partners Managing Partner Josh Wander, according to Bloomberg

BA Commands a Strong Buy Rating

Overall, the Street is optimistic about the stock and has a Strong Buy consensus rating based on 15 Buys and three Holds. Boeing’s average price target of $215.29 signals that the stock may surge nearly 45.7% from current levels. Shares of Boeing have declined 28.9% so far this year.

BA scores a ‘Perfect 10’ on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the market.

TipRanks data shows that financial bloggers are 70% Bullish on Boeing, compared to the sector average of 64%. Meanwhile, hedge funds are Very Positive about the stock, as they bought 148,100 shares of Boeing in the last quarter.

New Orders Bring Optimism  

Boeing is currently facing some regulatory and supply-chain headwinds. However, the world’s largest aerospace company seems to be well-positioned to keep dominating this space. The winning of new orders at the air show, improving delivery numbers, and recovering commercial business should further provide strength to its stock.

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