The Boeing (NYSE: BA) stock price darted upwards in the premarket session after United Airlines announced a big order from the company. The shares rose to $242 in premarket, 1% above its closing price of $239. This brings its past 12 months increase to more than 40% and its market capitalisation to more than $140 billion.
United Airlines buying spree
United Airlines, the $15 billion company, is in a buying spree. The company announced a $3 billion order from Boom Technologies. The company will receive 15 supersonic jets from the relatively new startup. It plans to use these supersonic planes for its flights from the US to business cities like London, Berlin, Hong Kong, and Tokyo.
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In a statement on Tuesday, the company announced that it will acquire 270 additional jets from Boeing and Airbus. 200 of these planes will be Boeing Max while the rest will be Airbus 320neos. In addition, the company will employ additional 25,000 union jobs, including pilots, mechanics, and flight attendants.
The company will use the new planes to increase its fleet while others will go towards replacing its ageing 757-200 planes. As a result, the firm intends to expand its economy and first-class seats in the planes.
The announcement came a week after the company said that it was cancelling many of its flights. It cited the fact that it did not have enough workers as demand rose. As such, it was critised since it received billions of dollars from taxpayers to ensure a smooth reopening.
Boeing stock has done relatively well as investors anticipate a swifter recovery of the aviation sector. It has also done well because of the recent recertification of the Boeing 737 Max planes.
Is the BA stock a buy?
Boeing has made a strong recovery in the past few months, making it one of the best performers in the Dow Jones. Analysts have taken note of the company’s performance. In a recent note, analysts at Berenberg increased their target from $215 to $245. Similarly, those at Goldman Sachs boosted their outlook to $307 while those at Cowen expect it to rise to $290.
Analysts expect that the company will be at a position to grow its order books as the aviation sector recovers. The company’s revenue dropped by 10% year-on-year to $15.22 billion in the most recent quarter. It had a loss per share of $1.53. The management touted orders from companies like Southwest, Alaska Airlines, and Dubai Aerospace Enterprises.
Boeing stock price analysis
The daily chart shows that the BA stock price has jumped by more than 175% from the lowest level in 2020. The stock has formed an ascending channel that is shown in blue. It is also along the 50-day and 100-day moving averages. Notably, the stock has formed a bearish head and shoulders pattern. Therefore, the stock could soon break out low. If this happens, the next key support level will be the psychological level of $200.
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