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Boeing Rides High on Growing Optimism, Stock Hits a New High

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Boeing is at an all-time high

The Boeing Company (BA) stock has hit new highs week after week since it reported its impressive fourth-quarter earnings results on January 30. 

The stock achieved a new all-time high of $418.05 on February 15 before closing slightly lower at $417.97.

Shares of Boeing have made a remarkable run so far in 2019. The stock has risen 29.6% YTD (year-to-date) and has outperformed the returns of major US indexes. The Dow, the NASDAQ, and the S&P 500 are up ~11%, 12.6%, and 10.7%, respectively, YTD. Boeing stock has also surpassed the returns of the Industrial Select Sector SPDR ETF (XLI), which has risen 17.5% in the same timeframe.

Boeing has also been the best performer among the stocks that make up the Dow 30 Index. With a YTD gain of 21.4%, IBM (IBM) is the second-best performer, followed by United Technologies (UTX) with 20% and Goldman Sachs (GS) with 18.8%.

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Driving factors

Growing optimism about the company’s future performance is driving its stock price higher. Apart from the company’s impressive fourth-quarter results, a series of positive events in the last couple of weeks have increased investors’ confidence in the stock.

Boeing recently announced the ramp-up of its production of its 737 and 787 jet models. Increased production means a higher number of deliveries, meaning more incremental revenue and cash flow for the company.

On February 5, Boeing announced that it would be partnering with and investing in supersonic jet startup Aerion. The partnership is expected to open new avenues of growth for the company, as it has now become a part of the futuristic aviation market.

The company announced two major developments in its Defense, Space & Security segment last week. Firstly, it got the final approval for the first delivery of its KC-46 air-fuel tanker by the US Air Force on February 10. Secondly, it won a $43 million contract from the US Navy to build super submarines. Though the contract amount is small, it likely has future implications, as the vessel will be one of a kind. It will be fully autonomous, which means it won’t require any life support and can be used in anti-submarine and anti-surface warfare.

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