Boeing Stock Soars 50% in a Month, but it’s Still a Buy

Boeing stock continues to extend the upside momentum as investor’s sentiments restored in the fundamentals of the largest passenger planemaker. The US and European authorities have lifted the ban on its flagship jet 737 Max that is grounded since early 2019.

On top, new orders for 737 Max has also been enhancing investor’s sentiments. Shares of the largest commercial planemaker soared almost 50% in the last month alone to the highest level since March this year.

BA The Boeing Company daily Stock Chart

Boeing stock is currently trading around $240, with expectations that shares will rally further amid improving fundamentals for the passenger airline industry.

New 737 Max orders supports Boeing stock rally

Some investors believe shares of the largest passenger planemaker are offering a buying opportunity as several catalysts are suggesting further upside potential. New orders for 737 Max is among the biggest catalyst.

Boeing received orders for 75 additional 737 MAX jets from Ryanair, with 50 of the planes set to be delivered in 2021.

In addition, United Airlines is likely to receive the first Max delivery since the jet was grounded in 2018. Several airlines are also planning to resume 737 Max commercial flights from this month. The largest Max operator Southwest Airlines has hinted at buying more Max jets in the days ahead.

Federal Aviation Administration has issued the first airworthiness certificate for 737 MAX early this week since the plane experienced two fatal crashes in 2018.

Improving passenger outlook supports buying on the dip

Boeing stock is currently trading significantly below its all-time high of $420, which in some investors view is a buying opportunity for long-term investors.

Air restrictions are likely to soothe in the days ahead amid the coronavirus vaccine discovery. Several companies have already launched a virus vaccine that has more than 90% efficiency in treating the infection. The market analysts say 2021 will be a recovery year while airlines will shine again in 2022.

Siraj Sarwar - Lead Analyst
@tradethedayfx
Siraj Sarwar has been performing analysis on the stock market, equity research and general business consultation. He regularly contributes articles on economics, commodities, and equities to the world's leading websites, including Trade the Day, SeekingAlpha, TheStreet, and MSN.
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