It’s a bit of good news for aerospace stock Boeing (BA) as a hefty new order arrived in, and Boeing will be able to make better use of that cash as its layoff train continues on, this time in Alabama. The news proved good enough for investors, who sent shares up nearly 3% in Wednesday afternoon’s trading.
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The good news for Boeing was that the United States Army put in an order for three new Chinook CH-47F Block II helicopters. That means a hefty payday of $135 million, noted a Boeing press release. The release noted that this was a part of the army’s “modernization efforts,” and will serve as a means to help “…soldiers get to their destinations and have the equipment they need to accomplish the mission.” The Block II CH-47F, meanwhile, aids in this with “…increased payload capacity and expanded range…”
Further, starting in January 2025, 158 employees at the Huntsville, Alabama plant will be losing their jobs, as noted by a report from Al.com. It is part of a larger effort at Boeing to “…adjust..our workforce levels to align with our financial reality and a more focused set of priorities.”
Sell, Mortimer, Sell!
Meanwhile, some are looking at Boeing’s current situation right now, and pointing out that while cost cuts are good, sales are better. In fact, one report noted that Boeing’s current turnaround plan depends heavily on “…stabilizing production, reducing inventories, and improving free cash flows to regain competitive positioning.”
Given that currently, Boeing has about $83 billion in inventories—a whopping $72.1 billion of that is connected to its commercial airline operations—Boeing needs to close deals and ship product in order to really pull itself out of its collective funk. In fact, the report noted, actually delivering 787 and 737 Max planes could reduce physical inventory by around 35%. That kind of drop all at once should be top of mind for all of Boeing.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, six Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 31.84% loss in its share price over the past year, the average BA price target of $193.38 per share implies 21.36% upside potential.
