Aerospace stock Boeing (BA) managed to land another deal with the United States Air Force, a move that means another nine-figure payday for the company. Some even believe this is a signal of greater stability at Boeing. Investors were pleased, though not excessively so, as Boeing shares notched up fractionally in Thursday afternoon’s trading.
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The contract in question is valued at $101.29 million, and is connected to the KC-46 tanker program, reports note. The KC-46 tanker is a very big part of Boeing’s defense operations, so seeing this deal go off this smoothly is a welcome sign.
The contract will run for one year, reports note, and covers support services as well as repair parts. Meanwhile, the Defense Logistics Agency Aviation will handle oversight duties on the contract. Some may question the overall value of this contract, or how it suggests stability. While $101 million is not exactly much in Boeing terms—that is about the list price of one 737 MAX jet—the fact that this is just the latest deal with the government suggests it will be sticking with Boeing for the foreseeable future.
Ramping Up in Everett
Boeing is also stepping up its production capabilities in Everett, adding a fourth production line for the 737 MAX line. This is the first time that Boeing will assemble a narrow-body jet outside of Renton, reports note. Boeing originally planned to launch this line back in 2023, using space obtained after it discontinued the 747 lineup.
While Boeing may be operating on a restricted basis thanks to the production cap still in place from the Federal Aviation Administration (FAA), there were some signs previously that the cap could get lifted this year to 47 planes per month. In such an event, the extra production capacity could prove helpful, assuming the cap does get another boost.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 14 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 40.05% rally in its share price over the past year, the average BA price target of $274.92 per share implies 25.24% upside potential.
