Boeing (BA) Hits A 52-Week High On Consistent Performance

Aerospace behemoth The Boeing Company (NYSE:BA) hit a new 52-week high of $296.82 before closing the Dec 14 session a tad lower at $293.88. The stock has delivered an impressive one-year return of about 90.2% while the S&P 500 has returned 18.2% over the same time period.

Over the past 52 weeks, Boeing’s share price has ranged from a low of $153.06 to a high of $296.82. Average volume of shares traded over the last three months is approximately 3.26 million.

Why is Boeing Moving Up?

Boeing with its high quality commercial aircraft and defense offering is well poised to gain from improvement in passenger traffic and rise in defense budget.

Its defense business stands out among its peers by the virtue of its broadly diversified programs, strong order bookings and order backlog. Boeing remains on track with the $52 billion KC-46 aerial tanker program. It is scheduled to complete delivery of all 179 aircraft by 2027. Apart from the KC-46 aerial refueling tanker program, the new organization will also oversee the building of the presidential aircraft for the Air Force along with the CST-100 spacecraft for NASA.

At the end of the third quarter, the backlog of commercial airplanes touched 5,679. This clearly indicates the dominance and popularity of Boeing in commercial aerospace. The company received orders for 223 airplanes in the last two months.

Per Boeing's current market outlook, the company anticipates that the world will need 41,030 new planes, worth $6.1 trillion between 2017 and 2036. Boeing expects single-aisle jets to be the major driver behind demand growth, comprising 72% of the total projection. This translates into worldwide demand for 29,530 single-aisle jets, worth $3.2 trillion, in the next 20 years.

Boeing’s single aisle 737 MAX and the current 737-800 will be the major growth catalysts and the company expects to boost 737 production to 57 airplanes per month in 2019 from 52 per month in 2018. However, Boeing is expected to face tough completion from Airbus SE’s (OTC:EADSY) single aisle A-320 aircraft.

Internationally, the company is witnessing strong demand for its commercial and defense products. Boeing is also expanding its presence in cyber security, intelligence and surveillance and unmanned systems. The rising foreign military sales contracts are more than welcome along with the domestic orders.

Thanks to its consistent performance, the company is also able to increase value of its shareholders through buyback and repurchases.

Long-term earnings growth rate is expected to be 13%. The company came out with positive earnings surprises in each of the last four quarters resulting in average surprise of 5.84%. Boeing’s 2017 and 2018 earnings estimates moved up 0.5% and 2.4%, respectively in the last 60 days.

Price Movement

Boeing stock has returned 90.2% in a year, outperforming Zacks Aerospace and Defense industry’s gain of 42.8%.

The company’s capability of churning out new and improved quality products is helping it maintain a strong grip in commercial airplane market and boosting its backlog.

Zacks Rank & Stocks to Consider

Boeing currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are Huntington Ingalls Industries, Inc. (NYSE:HII) and Leidos Holdings, Inc. (NYSE:LDOS) , both having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Huntington Ingalls Industries reported positive earnings surprises in three of the last four quarters resulting in an average positive surprise of 14.22%. Its 2017 estimates improved 4.2% to $12.01 from $11.53 in the last 60 days.

Leidos Holdings reported positive earnings surprises in three of the last four quarters resulting in an average positive surprise of 14.81%. Its 2017 estimates increased 3.9% to $3.69 from $3.55 in the last 60 days.

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