Boeing Set To Fly Higher

This is source I found from another site, main source you can find in last paragraph

We believe the shares of Boeing Co. (BA) are gearing to scale new horizons in the next few months. We think the stock has at least 25% upside from current levels.

Let us tell you why?

*Strong interest in Boeing's 737 MAX 10

This new Boeing model unveiled at the 2017 Paris Airshow to take on rival Airbus' A321neo, is expected to be the most profitable single-aisle airplane, offering the lowest seat costs ever. The operating cost per seat for the MAX 10 is expected to be 5% lower than that of A321neo, resulting in 5% lower trip costs as well. The maximum seating capacity of the MAX 10 is 230, 10 more than that of the MAX 9 series. Boeing says it already has more than 240 orders for the new series with commitments from 10+ customers, including BOC Aviation, GE Capital, CDB Aviation, TUI Group, Tibet Financial Leasing, and SpiceJet.

* Better-than-expected Growth in Demand

Boeing Commercial Airplanes Chief Executive Kevin McAllister forecast that the world would need 41,000 commercial jets over the next 20 years. This represents, a 4% increase from Boeing forecast last year. A detailed forecast will follow from Boeing on Tuesday. Last week, rival Airbus projected the need for 34,899 jets over the next 20 years. This outlook was 6% above its own 2016 guidance.

*Defense business Sparking up

Boeing is shaking up its $29.5 billion defense business, by eliminating 50 executive positions and splitting its defense, space and security division (BDS) into smaller entities. The move, according to the division's boss, Leanne Caret, will speed decision-making and help the business better anticipate the needs of defense customers. The business accounted for nearly a third of Boeing's total revenue in 2016.

Boeing's BDS revenues have declined from $33.2 billion in 2013 to $30.9 billion in 2014, $30.4 billion in 2015 and $29.5 billion in 2016, due to loss of key contracts and reduced defense spending. Backlog at BDS at the end of Q4-2016, was $57 billion, of which 37% represented orders from international customers. However, backlog at BDS at the end of Q1-2017 was $63 billion, of which 34% represented orders from international customers. The company has reaffirmed its BDS revenue guidance for 2017 to be between $28 billion and $29 billion.

Last week, Qatar's Ministry of Defense said it signed a deal to buy F-15 fighter jets from the United States for $12 billion, amid escalating tensions with its neighbors. The deal went through despite U.S. President Donald Trump criticizing the country for supporting terrorism. November last year, the Obama administration approved possible sale of up to 72 F-15QA aircraft to Qatar for $21.1 billion. Boeing is the prime contractor on the fighter jet sale deal. The deal happening is a plus for Boeing.

Boeing also has its eyes set on the contract for the next generation of the Global Positioning System: GPS3. Although, Lockheed Martin has been contracted to supply the first batch, due to some delay and snags, the U.S. Airforce has solicited other contenders to build the next batch of satellites. Boeing has responded to this solicitation stating that it continues to believe in affordable low-risk alternate GPS solutions. Boeing has the scale to deliver the solutions for this mission and has already built the platform and major payload components for the GPS 2F satellites. Chances of Boeing landing the deal are likely, although one can never be too sure.

by RTT Staff Writer

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