On Nov 23, shares of The Boeing Company BA soared to a new 52-week high of $150.81, before closing the trading session at $149.74. The closing price of this aerospace and defense prime, which has a market cap of around $92.4 billion, reflects a year-to-date gain of roughly 3.6%.
Over the past 52 weeks, Boeing’s shares have ranged from a low of $102.10 to a high of $150.81. The average volume of shares traded over the last three months is approximately 3.5 million.
What's Driving Boeing Up?
Last month, Boeing delivered stellar third-quarter 2016 results on the back of strong defense deliveries. Earnings beat expectations and were up an impressive 39.3% year over year. The company raised its core earnings and revenue guidance for 2016. Boeing expects to deliver 745–750 commercial airplanes in 2016, which would allow it to surpass its European rival Airbus Group SE’s EADSY delivery numbers.
Recently, Boeing received purchase commitment from Fiji Airways for five 737 MAX 8s. Again, in October, the company received an order from Swiss International Air Lines for one 777-300 ER (Extended Range) for $339.6 million at list prices. The company also inked a deal to sell a dozen of 787-9 Dreamliner jets to China Southern Airlines Co. Ltd. These contracts will contribute significantly to the company’s top line.
In the defense arena, Trump’s victory in the Presidential race may turn out to be a growth catalyst for Boeing and other defense majors like Lockheed Martin Corp. LMT and Northrop Grumman Corp. NOC. During his pre-electoral campaign, Trump had made promises of an increase in defense spending and expansion of troops. Moreover, a quick review of the past reveals that the Conservative Republican Party has usually advocated in favor of higher military spending.
Boeing continues with investor-friendly moves, paying regular dividends and repurchasing shares, which reflect its strong operational performance. During the first nine months of 2016, Boeing paid $2,084 million in dividends, up 10.7% from the prior-year payout. The company also repurchased 51.4 million shares for $6.5 billion.
Boeing currently holds a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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