Boeing's 737 plans are key to stock liftoff
Industry analysts say a production increase could send shares flying as high as $100.
By Ted Reed, TheStreet
"Global demand for aircraft remains healthy and resilient given requirements to replace aging fleets, satisfy growth in emerging regions and add more fuel efficient aircraft to existing fleets," wrote Gleacher & Company analyst Peter Arment, in a report issued Thursday.
Boeing shares were trading up 0.5% to $74.25 Thursday afternoon. Arment has a buy on the shares and a $100 price target. "With major catalysts for the 787 and 747-8 programs upcoming during the next two months, coupled with more orders for the mature programs, we believe Boeing should continue to outperform as a well-positioned later cycle industrial stock," he wrote.
Meanwhile, RBC Capital Markets analyst Rob Stallard called the rate increase "a positive development for Boeing and the aerospace supply chain."
The ramp-up had been anticipated, Stallard said, but it came sooner than he expected, implying not only "continued robust airline demand for the plane, but also Boeing's ability to reassure suppliers that this is a realistic, achievable and sustainable rate increase."
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The 737 is the most successful aircraft in history. In some ways, Boeing has for years been operating as two companies: Good Boeing -- represented by the 737 and the 777 -- which profitably supports Bad Boeing, represented by the delay-wracked development programs for the 787 and 747-800.
As the Paris Air Show approaches, with Boeing ready to trumpet near-term first deliveries of both of its delayed aircraft, it is possible that Boeing is about to enter a golden age marked by the capability to deliver ever-increasing numbers of all four aircraft.
That Boeing, if it ever came to be, could easily be worth $100 a share.
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