It has been a long time in the making for aerospace stock Boeing (BA), as it has officially begun production of the 777X freighter. And by drilling a hole in a wing spar, Boeing kicked off what will hopefully be a new and productive line of business. Investors were a bit less sure, though, as Boeing shares slipped fractionally in Thursday afternoon’s trading.
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“It may seem small (but) it’s that one hole that we’re about to drill that gets everything started.” Those words were from vice president and general manager of the 777 / 777X program, Jason Clark, ahead of a 10-second countdown. Following the countdown, a robotic arm drilled the first hole into a wing spar and started off a production line that represents “…years of development…years of engineering…years of supply chain procurement and contracting…” all in one downward motion.
The 777-8F, the freighter arm of the 777X family, is considered not only more fuel-efficient than other widebody aircraft on the market, but also, it is actually larger than those other aircraft too. The plane even boasts foldable wingtips that allow the plane to readily fit through airport gates. The 777X line has overcome a series of challenges going back years, not only seeing manufacturing defects, but also facing concern from other parts of Boeing’s product line, particularly two 737 Max crashes back in 2018 and in 2019.
The Boeing Win From President Trump
More than one outside observer, myself included, has wondered why every time President Trump goes somewhere, it seems to involve the phrase “…bought Boeing planes” in some way. So why was every place the president visited suddenly so keen to buy Boeing aircraft?
A report from Axios gave us some insight therein. It noted that India had been considering Boeing orders “…as leverage in their own trade deal negotiations with the United States.” It seems to be a good way for countries to narrow a trade gap comparatively quickly with a thing they probably need anyway. A price list from 2023 shows Boeing planes starting at $89 million, which has likely only gone up from there. So buying 10 or 50 or even a hundred is a good way to make a big purchase and potentially get some better terms in the broader trade deal.
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 18 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 26.87% rally in its share price over the past year, the average BA price target of $250.84 per share implies 7.54% upside potential.
