Boeing stock gains on positive 737 production timeline
- Boeing CFO told a conference that the company was making headway toward 737 production target.
- Boeing delivered 32 737s in February but is targeting the FAA limit of 38.
- CFO says that production of 787 Dreamliners will surpass five per month.
- Market rises ahead of Fed interest rate decision.
Boeing (BA) stock zoomed higher on Wednesday after its chief financial officer told an investor conference that the airplane maker was on schedule to meet its target of delivering the government’s mandated limit on 737 Max model planes per month.
BA stock ignited on the announcement, spiking more than 6% to $172 per share.
Meanwhile, the US stock market is advancing ahead of the Federal Reserve’s (Fed) interest rate decision scheduled for Wednesday afternoon. With the flurry of recent poor data on Retail Sales and slowing economic growth, the market doesn’t expect a rate cut but to hear the possibility of future rate cuts from Fed Chair Jerome Powell.
The Dow Jones Industrial Average (DJIA), of which Boeing is a member, has gained 0.4%, while the NASDAQ advances about 0.7% at the time of writing.
Boeing stock news
Chief Financial Officer Brian West excited listeners at a Bank of America investor conference on Wednesday when he claimed that Boeing was in fantastic shape to meeting its 38-per-month limit on producing 737 Max airplanes.
Boeing was drastically slowed down after a three-month strike by machinists last autumn, but West said Boeing was quickly reaching lift-off speed. In February, Boeing delivered 32 737s.
The Federal Aviation Administration (FAA) has limited Boeing to no more than 38 units a month after previous production failures on 737 Max models. West said that Boeing is also completing five 787 Dreamliners per month but that this number will increase.
Despite Boeing’s production limit on the 737 models, demand is still there. Japanese Airlines on Wednesday said that it would add an additional 17 units of 737-8 models to its previous 2023 order of 21 units.
The positive news comes after Wells Fargo published a negative report on Boeing on Monday. Analysts at the bank said that multiple financial constraints, product setbacks and rising labor costs would cut into Wall Street’s rosy outlook on Boeing’s turnaround. Instead of $9 billion in free cash flow for 2027, the analysts said to expect $6 to $7 billion.
“Our forecast is approximately 25% below consensus in 2027, which we use to value the stock, and would be about 17% below excluding the impact of investment in a new aircraft, which we assume starts that year,” wrote Matthew Akers, an analyst at Wells Fargo.
Boeing stock forecast
Boeing stock has been stuck in the short term between $138 (November 2024) on the downside and $188 (January/February 2025) on the upside. In the interim, BA shares rose off a higher low at $147 one week ago, so most observers think that taking out the $188 resistance is possible.
One good sign in this direction is that Boeing stock rose above the 200-day Simple Moving Average (SMA) on Wednesday. Overall, however, it is clear that Boeing shares remain stuck on consolidation.
Boeing daily stock chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
