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Boeing (BA), the behemoth aerospace company, reported superb earnings in their 4th quarter report released before the opening on Wednesday last week. Their 4th quarter earnings of $2.31, that beat Wall Street estimates by 12%, were driven by burgeoning deliveries of commercial airplanes. The company also reported an increase in their year-end backload to $502 billion from $440 billion at year-end 2013. This backlog is 5.5 times 2014 revenues of $90.8 billion. The sharp increase of 77% in commercial airplane deliveries more than offsets a decline of 14% in revenues in the defense sector, and resulted in an expansion in operating margins of 130 basis points to 12.1%.
These positive numbers were clearly unexpected, as BA was down sharply on Tuesday ahead of these superior earnings and guidance. The stock subsequently rallied from a close of 132.48 on Tuesday to a high on Thursday of 148.25. With the market very week on Friday, the stock sold - $2.41 to close the week at 145.37. Analysts at Credit Suisse and Canaccord Genuity responded by raising their price targets for Boeing to $152 and $160 respectively, while reiterating their buy recommendations. You can expect other Wall Street analysts to follow suit with earnings estimate increases that will add further demand for BA shares.
With further market weakness anticipated, it may be possible to buy BA under $140 in the days ahead, which would be an ideal pull-back target.
Boeing has a very bullish Chaikin Power Gauge stock rating which is driven by Industry Group strength, very strong technical, and positive earnings surprises that have resulted in positive trends in analyst estimates revisions and opinions which have led to higher price targets for BA.
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Chaikin Analytics stock research
Chaikin Power Gauge stock rating model
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
