While many of us regard aerospace stock Boeing (BA) as mostly being an aircraft producer, there are other things it does. In fact, one of the least-considered Boeing businesses is its satellite trade. Lately, the Boeing satellite trade has done quite well for the company with a big new sale coming in. And Boeing investors are feeling the love as well, sending shares up fractionally in Monday afternoon’s trading.
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Boeing set up an agreement with the United States Space Force valued at $2.8 billion to establish “secure satellite communications” as part of the larger Evolved Strategic SATCOM (ESS) program. The program calls for two satellites initially, but has room to expand outward to cover things like Arctic operations, operations from major facilities like the Vandenberg Space Force Base, as well as broader, less-specific expansion efforts.
The ESS program has $12 billion backing it, part of which will go toward covering the aforementioned $2.8 billion price tag. The remainder will have other uses, including, potentially, another two satellites from Boeing, reports note. Boeing actually managed to beat out Northrop Grumman (NOC) to land the contract, reports further noted.
More Likely to Come
This news comes at an interesting time for Boeing, as it recently brought out the ninth and tenth O3b mPower satellites to SES (SES). The satellites actually came with some particularly robust systems geared toward addressing a power problem. Oddly, the power problem in question, as it turned out, was largely rendered moot by solar storms.
But despite that unexpected fix, Boeing is said to be working on another three satellites for SES. That by itself is prompting some to consider adding Boeing to their portfolios as a “space technology” stock, and not without reason. But add on the Space Force contract and suddenly the reasons to consider Boeing as a space tech play surge.
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 17 Buys, two Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 16.19% rally in its share price over the past year, the average BA price target of $226.42 per share implies 4.95% upside potential.
