The Boeing Company (BA) reported a very solid quarter. Demand remains high, with the company booking 460 net orders in the second quarter.
Summary
- 220 – Air India
- 300 – Ryanair
On the conference call, The Boeing Company CEO David Calhoun had this to say;
“Broadly, demand is strong and resilient. The need for 42,000 airplanes over the next 20 years is what the industry is telling us. And with demand strong, the supply side of the system is beginning to settle down. Our focus remains on execution and driving stability in the production and the supply chain and we are making steady progress.
The Boeing Company – Daily Chart
Price action consolidated for seven months, starting in January 2023.
“The longer the base the higher in space?” Yes, we’re looking for a move in the coming months that will close the gap between current prices and 2018 when “free cash flow” was last positive.
“Free cash flow was positive $2.6 billion in the quarter, significantly better versus last year and last quarter driven by higher commercial deliveries and favorable receipt timing.”
Considerations;
- Earnings will jump to positive again in 2024.
- RS Line is at 90 and rising, with price breaking out on above average volume.
- And, institutions are accumulating shares, with the stock receiving a (-B), one notch below best.
“IBD readers are perhaps most familiar with the Accumulation/Distribution Rating. It’s a good way to tell which stocks are being bought and sold by institutional investors. Stocks are rated on an A+ to E scale. A+ means heavy institutional buying. E signifies heavy institutional selling.”
The Boeing Company – Earnings
Second quarter revenue was $19.8 billion, that’s up 18% year-over-year. The growth was primarily driven by higher commercial volume, including increased 787 deliveries. Core operating margin in the quarter was minus 2% and the core loss per share was $0.82.
The Boeing Company – Weekly Chart
The weekly clearly shows the consolidation or base, followed by the massive breakout this week. The chart also shows targets overhead near $278 (+/-) that we look to achieve in the coming months if all goes well.
The $278 level is a 161.8% Fibonacci level from the recent lows to breakout highs, or about a 21% gain from Wednesday’s close..
The Boeing Company – Final Thoughts
The company reorganized in November 2022, consolidating eight divisions down to four. Price action and volume confirmed at that time that institutions liked what management was doing present and in the future. We bought too.
IBD’s CAN SLIM investment system focuses on companies with new products, new markets, new management or a company that is reformed or has a fresh strategy.
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Vinny
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