On Tuesday, RBC Capital maintained its positive stance on Boeing (NYSE:BA) shares, reiterating an Outperform rating with a steady price target of $215.00. The aerospace company's order activity has shown signs of moderation, with Boeing securing a modest 4 aircraft orders for its 787 model in May, bringing the total backlog to approximately 6,200 aircraft. The current backlog is comprised of around 4,750 units of the 737 MAX, 790 of the 787, about 540 of the 777, and roughly 100 of the 767 model.
Comparatively, Boeing's year-to-date order tally stands at 142, which is notably lower than the 223 orders recorded during the same period in 2023. The upcoming Farnborough Airshow, scheduled for July 22-26, is anticipated to be a significant opportunity for Boeing to secure orders, especially for widebody aircraft. The lower order intake in May suggests that airlines may be holding off on placing orders until the Airshow.
Despite the current order book's status, the sentiment surrounding these orders may not have the same impact as in previous years. Investors have increasingly shifted their focus towards Boeing's execution on production rather than just order intake. The priority for investors is now on aircraft production rates and the reduction of existing aircraft inventory, as these factors are critical for Boeing's operational performance and financial health.
Boeing's efforts to manage production and fulfill its substantial backlog will be closely watched in the coming months, with the Farnborough Airshow potentially serving as a catalyst for new orders. The company's ability to efficiently work down its inventory and meet production targets will remain a key point of interest for stakeholders in the aerospace sector.
In other recent news, Boeing reported a significant drop in plane deliveries for May, with only 24 commercial jets delivered to customers, a 52% decrease from last year. This reduction is due to the aerospace giant's slower production pace to address outstanding work and improve manufacturing quality.
Moreover, the company secured four new orders in May, all for 787-10 Dreamliners destined for Eva Air, bringing the gross order count to 142 for the year. However, after accounting for cancellations and conversions, the net total orders stand at 103 since the beginning of 2024.
UBS recently revised Boeing's price target to $240, down from $250, citing the company's unchanged aircraft deliveries forecast for the second quarter. Despite this, UBS maintains a Buy rating on the company's shares, indicating confidence in Boeing's recovery and future performance.
In space-related developments, Boeing's Starliner spacecraft successfully docked at the International Space Station (ISS), marking a significant milestone for the company. The docking was part of a mission that included the first manual flight of the Starliner in space by the crew.
CEO Dave Calhoun is scheduled to appear before a United States Senate panel to address ongoing safety concerns surrounding the company's aircraft, particularly the 737 MAX series. This follows the Federal Aviation Administration's restriction preventing Boeing from increasing production of its 737 MAX series. These are the recent developments in Boeing's operations.
InvestingPro Insights
In line with RBC Capital's optimistic outlook on Boeing, it's valuable to consider the financial metrics that could influence investor decisions. According to InvestingPro data, Boeing's market capitalization stands at a robust $112.72 billion, underscoring its significant presence in the aerospace industry. While the company's P/E ratio is negative at -51.75, reflecting challenges in profitability, the revenue growth over the last twelve months as of Q1 2024 is positive at 8.37%, indicating some resilience in its financial performance.
InvestingPro Tips suggest that Boeing is a prominent player in the Aerospace & Defense industry, but analysts have revised their earnings downwards for the upcoming period, reflecting concerns about the company's near-term profitability. Boeing's stock price movements have been quite volatile, which could be a consideration for risk-averse investors.
Notably, Boeing does not pay a dividend, which might influence income-focused shareholders. For more detailed analysis and additional InvestingPro Tips, investors can explore the dedicated page at Investing.com. There are currently 9 additional InvestingPro Tips available, and readers can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
These insights can help investors weigh Boeing's order activity and operational performance against its financial health and market valuation as they monitor the company's progress leading up to the Farnborough Airshow and beyond.
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