Boeing stock (NYSE: BA) reported its Q2 results on July 27, with revenue and earnings falling below the street estimates. However, BA stock has rallied around 7% in a week, while it’s up 21% in a month, partly due to positive news for its 787 airplanes. The U.S. Federal Aviation Administration has reportedly approved Boeing’s plan to resume 787 production . Also, Delta placed a large order of 100 aircraft with Boeing, with a total value north of $13 billion, bolstering Boeing’s stock price growth. Despite the recent rise, we believe BA stock has some more room for growth, as discussed below.
Looking at Q2, the company reported revenue of $16.7 billion (down 2% y-o-y) and EPS of $(0.37) (down from $0.40 in the prior year quarter), compared to the consensus estimates of $17.6 billion and $(0.13), respectively. A 10% rise in Global Services revenue and a 1% growth in Commercial Airplanes sales was more than offset by a 17% decline in Defense, Space & Security business. Our Boeing revenue dashboard has more details on the company’s segments.
Following the company’s recently announced Q2 results, we have revised Boeing’s Valuation to be around $205 per share (in line with our prior estimate of $203), which is 23% above the current market price of $167, implying that BA stock has some more room for growth.
But what about the near term?
Now that BA stock has seen a rise of 21% in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a very low chance of a rise for BA stock over the next month. A move of 21% in a month has occurred 52 times in the past ten years. Of those 52 instances, only 16 resulted in BA stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 16 out of 52, or about a 31% chance of a rise in BA stock over the next month. See our analysis of Boeing’s Stock Chance of Rise for more details.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data
- After moving 7% or more over five days, the stock rose on 54% of the occasions in the next five days.
- After moving 5% or more over ten days, the stock rose on 52% of the occasions in the next ten days.
- After moving 21% or more over a twenty-one-day period, the stock rose on 31% of the occasions in the next twenty-one days.
This pattern suggests a slightly higher chance of a rise in BA stock over the next five and ten days but a very low chance of an increase in the next twenty-one days.
Boeing (BA) Return (Recent) Comparison With Peers
- Five-Day Return: NOC highest at 8.1%; RTX lowest at 4.7%
- Ten-Day Return: LMT highest at 8.6%; RTX lowest at -0.3%
- Twenty-One Day Return: BA highest at 21.0%; RTX lowest at 1.7%
While BA stock looks like it has more room for growth, it is helpful to see how Boeing’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Vicor vs. Williams Sonoma.
With inflation rising and the Fed raising interest rates, among other factors, Boeing stock has fallen 18% this year. Can it drop more? See how low Boeing stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||1%||-13%||86%|
|Trefis Multi-Strategy Portfolio||4%||-10%||253%|
 Month-to-date and year-to-date as of 8/4/2022
 Cumulative total returns since the end of 2016
- U.S. approves Boeing inspection, rework plan to resume 787 deliveries, David Shepardson, Reuters, Jul 30, 2022 [↩]