Under normal circumstances, a deal valued in the low 10-figure range would be a welcome deal for just about any company. For some, it would double or triple their market capitalization. For aerospace stock Boeing (BA), however, it is just another Wednesday. A new deal with the United Kingdom to maintain helicopters is giving both sides some advantage, but investors were less than pleased. Boeing shares slipped fractionally in Wednesday afternoon’s trading.
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Boeing struck a deal with the United Kingdom valued at 879 million pounds sterling, about $1.193 billion in United States dollars. Boeing Defence UK will be handling the brass tacks of the deal, which will help keep Army Apache helicopters and Royal Air Force (RAF) Chinook helicopters at the ready. It will also serve to help protect hundreds of jobs in the armed forces, reports note.
The move stemmed from remarks by Lord George Robertson, former Labour defence secretary, who declared that the United Kingdom was “under-prepared” for future engagements. Robertson also declared that “…Britain’s national security and safety is in peril,” a development which apparently required more helicopter maintenance to address. The government checked its books, discovered that there was an extra five billion pounds in the defense budget, and thus decided to write a hefty check to Boeing to keep its helicopters ready.
A Rare Team-Up
Meanwhile, Boeing also recently got together with immediate rival Airbus (EADSY) to settle on specific iconography to denote accessibility features. Iconography here means pictures that denote key features of an aircraft, or other location, like the classic “person-in-a-wheelchair” denotes a location that is “wheelchair accessible.”
If this seems like a cosmetic issue, there is actually much more at stake here. A report from Able Americans Director Rachel Barkley noted, “Passengers with disabilities daily face the indignity of Boeing’s aircraft designs. There is, for example, limited or no access to onboard toilets – especially on single aisle aircraft. This means many passengers with disabilities are forced to wear adult diapers for the duration of their flights.” Hopefully the new iconography will help with that in some way.
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 43.01% rally in its share price over the past year, the average BA price target of $274.92 per share implies 23.16% upside potential.
