There has been some unexpected trouble out at aerospace stock Boeing (BA) recently, and over an unexpected source. It has nothing to do with the issues the 737 MAX line has faced, nor the still-behind 777X line. The problem currently is the E-7 Wedgetail, which is currently caught in a “political tug-of-war” right now. Investors were not especially pleased, and Boeing shares slipped fractionally in Monday afternoon’s trading.
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The E-7 Wedgetail, interestingly, is actually based on the 737. It is even built using a 737 NG airframe, reports noted, and given a series of upgrades, including upgraded sensors, radar capability, and connectivity systems. The result, a plane that can successfully “scan the skies” and report back, an “early warning and control aircraft.”
The Wedgetail is actually catching on, and the United States had a contract for 26 of these planes already to replace the E-3 Sentry. But Defense Secretary Pete Hegseth canceled said contract, noting that costs were surging out of control and the program had already been delayed several times. But Congress stepped in and added $400 million to the E-7 program, apparently even over the Secretary of Defense’s objections.
Big Apache Deal
While this deal is proving a little troublesome for Boeing right now, another deal seems well on track to make up for it. Boeing picked up a contract for Apache helicopters at its plant in Mesa, Arizona. The contract was valued at $4.7 billion.
Not only will Boeing build the AH-64E helicopter, it will also build the Longbow crew trainer and an assortment of components and spare parts. The contract is a long-term one, with all work expected to be complete by May 30, 2032.
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 13 Buys, two Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 20.74% rally in its share price over the past year, the average BA price target of $249.07 per share implies 32.6% upside potential.
