There was good news mixed with a bit of bad news for aerospace stock Boeing (BA) today, as the St. Louis strikers declare that they are “…in it for the long haul.” Despite this, Boeing also revealed that it landed a hefty new contract with the United States Army to provide logistics services. The two news items coalesced into a whole that proved palatable to investors. Sufficiently palatable, in fact, to send shares up nearly 1.5% in Tuesday afternoon’s trading.
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The new contract, which may run for five years depending on a variety of circumstances, is valued at $883.1 million. Boeing will be providing both cargo engineering and logistics support services under the terms of this contract. The contract winner was selected via an internet solicitation followed by an offer phase, which, apparently, only Boeing responded to. The contract received one offer, reports noted, which by process of elimination means Boeing was the sole respondent.
This is not Boeing’s first contract, either, but rather its latest. Back in June, Boeing landed a $227.3 million contract modification from the Army, and also landed a $101.6 million contract back in March. Boeing’s work as a government contractor is both well-known and widely regarded.
“We’re in it For the Long Haul”
Meanwhile, word started emerging from the picket lines in and around St. Louis, as union members began striking yesterday. And they mean to keep right on striking until they get what they call a “fair deal.” Assembly mechanic Lathaniel Johnson declared defiantly, “We’re in it for the long haul. That’s what unions are. Unity.”
Johnson also went on to declare that Boeing’s latest contract proposal featured a 20% raise over the next four years, which was insufficient as far as he was concerned. There were also no changes made to vacation, sick leave and healthcare options. However, the newest contract did remove a proposal for an alternate workweek schedule, reports noted, that would have allowed for four 10-hour shifts in a week or three 12-hour shifts.
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 34.72% rally in its share price over the past year, the average BA price target of $257.21 per share implies 14.47% upside potential.
