Under normal circumstances, aerospace stock Boeing (BA) probably should have seen its stock rise after landing a new deal with Israel for military aircraft. Admittedly, Boeing did have to share the limelight with Lockheed Martin (LMT), but a sale is a sale. It was apparently not sale enough for investors, though, who sent shares sliding nearly 2% in Monday afternoon’s trading.
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The Israeli Ministerial Committee on Procurement recently approved a deal to buy not only F-35s, but also F-15IA fighter aircraft, from both Lockheed Martin and Boeing. The deal is worth “…tens of billions of dollars,” reports note, and is also the first part of a much larger plan to put about $119 billion into giving the Israeli military a leg up.
The move will help to “…strengthen readiness ahead of a demanding decade for Israeli security,” the committee noted. The two fighter squadrons will also serve as a major part of long-term military buildup, though not the only part. Reports note that quite a bit of that budget will go to development of local programs, including munitions production and “groundbreaking” aircraft.
Years-Long Process
Meanwhile, new reports suggest that incorporating changes on the Boeing 777-9 will take years. There are currently about 30 777s that will need change incorporation, and an entire team of Boeing staffers is working to build changes into the aircraft.
Boeing CEO Kelly Ortberg noted, “Change incorporation is basically for the airplanes that we have built, [we must] incorporate all the changes that have happened since they’ve been built. Things that result from the certification program, and things that happen as a result of productivity improvements or process improvements. We go back in, and we incorporate all those changes before we make the delivery. It is a pretty massive activity that we have underway.”
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 16 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 21.95% rally in its share price over the past year, the average BA price target of $274.27 per share implies 23.04% upside potential.
