Sometimes it is hard to tell just what investors want out of aerospace stock Boeing (BA), because it landed another big deal recently, though investors seemed annoyed by it all. It was not a new deal, so much as it was an expansion of an old deal. But El Al Airlines (ELALF) bought a few more Boeing 787 Dreamliners, and investors sent shares sliding nearly 3% in Thursday afternoon’s trading.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
The original deal called for El Al to buy 12 Dreamliners, with an option to buy another six, reports note. And El Al did indeed exercise that option, planning to buy another six. However, it exercised a second option within the deal that would allow El Al to substitute 787-9 Dreamliners with 787-10 Dreamliners for delivery between 2030 and 2032. Financing options were not noted, as El Al plans to consider financing options closer to the delivery time.
Levy Halevy, El Al’s chief executive, noted, “Expanding the 787 fleet allows us to increase capacity (and) improve efficiency. This is a key step in our strategy to build a modern, profitable and market-leading airline.” With El Al currently operating 17 787s, and planning to increase to 28 by the end of the decade, the end result is that El Al is putting a lot of faith in Boeing aircraft.
Surging Hiring
With Boeing ramping up its production, and looking for another expansion of the Federal Aviation Administration (FAA) production cap on 737 MAX jets by the end of the year, it is little surprise that Boeing is stepping up its hiring as well. Reports note that Boeing is hiring between 100 and 140 new factory workers a week.
The hiring binge is not just related to expansion efforts, however. Boeing is also actively replacing its retirees to maintain current levels as it expands. Further, many of these new employees are union employees, as reports say that Boeing’s unionized workforce now measures over 34,000, with those numbers poised to increase in the near term.
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 38.31% rally in its share price over the past year, the average BA price target of $274.92 per share implies 25.99% upside potential.
