What’s next for Boeing stock after a 20% rise in a month?

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Boeing shares (NYSE: BA) reported its second quarter results on July 27, with sales and profits below normal estimates. However, BA stock is up about 7% in a week, while it is up 21% in a month, partly due to positive news for its 787 aircraft. The US Federal Aviation Administration has reportedly approved Boeing’s
BA
plan to resume production of the 787 [1]. Delta also placed a major order for 100 aircraft from Boeing, worth a total north of $13 billion, boosting Boeing’s share price growth. Despite the recent gains, we believe BA stocks have some room for growth, as discussed below.

Looking at the second quarter, the company reported revenue of $16.7 billion (-2% yoy) and EPS of $(0.37) (down $0.40 in the prior year quarter), compared with the consensus estimates of $17.6 billion and $0.13, respectively. . A 10% increase in Global Services revenue and a 1% growth in commercial aircraft sales was more than offset by a 17% decline in the defense, aerospace and security businesses. U.S Boeing revenue dashboard contains more details about the business segments.

Following the company’s recently announced Q2 results, we have the Rating of Boeing about $205 a share (in line with our previous estimate of $203), which is 23% above the current market price of $167, implying BA shares have a little more room for growth.

But what about in the short term?

Now that BA stock is up 21% in a month, will BA stock continue its upward trajectory or is it likely to fall? Judging by historical achievements, there is: a very low probability of a rise for BA shares the coming month. A 21% move in a month has happened 52 times in the last ten years. Of those 52 cases, only 16 led to an increase in BA’s stock in the subsequent one-month period (twenty-one trading days). This historical pattern reflects 16 out of 52, or about a 31% chance of an increase in the BA share the coming month. See our analysis of Boeing’s Stock Chance of Rise for more details.

Calculating ‘Event Probability’ and ‘Chance of Rise’ using data from the last ten years

  • After a movement of 7% or more for five days, the proportion increased in 54% of cases in the following five days.
  • After a movement of 5% or more for ten days, the proportion increased in 52% of cases in the following ten days.
  • After moving 21% or more over a twenty-one day period, the proportion increased in 31% of cases in the following twenty-one days.

This pattern suggests a slightly higher probability of a rise in BA stock in the next five and ten days, but a very low probability of a rise in the next twenty-one days.

Boeing 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 stocks look like there’s more room for growth, it’s helpful to see how Peers from Boeing rate on metrics that matter. Other valuable comparisons for companies in different sectors can be found at Pear Comparisons.

In addition, the Covid-19 crisis has led to many price discontinuities that can provide attractive trading opportunities. For example, you will be amazed at how counterintuitive stock valuation is Victor vs. Williams Sonoma.

Due to rising inflation and the Fed’s raising of interest rates, Boeing’s stock has fallen by 18% this year. Can it go down even more? See how low Boeing stocks can go by comparing the decline in past market crashes. Here’s a performance breakdown of all stocks in past market crashes.

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