Boeing stock price has pulled back in the past few weeks, moving from the year-to-date high of $254 to the current $236. Still, the company has some potential catalysts that may drive it higher in the coming weeks or months.
India and potential Boeing orders
There are signs that Boeing’s business is expecting more orders in the coming months, a move that will see it narrow the backlog with Airbus.
In a statement, Piyush Goyal, India’s Commerce and Industry minister, said that the country was preparing to make an $80 billion order from Boeing. With services and engines included, he believes that the value of imports from the United States will be worth over $100 billion.
The minister said this as he commented on the recently announced deal between the US and India that reduced the tariff to 18%. Air India recently announced an order of of 30 737 MAX planes last month.
Another potential catalyst for Boeing is that Donald Trump plans to visit China in April to meet with Xi Jinping. Trump has always been a transactional person, and China will be keen to please him.
Therefore, there is a likelihood that Beijing will commit to making huge purchases from the United States. While agriculture will be discussed, there are chances that Beijing will ask its airlines to make huge orders from Boeing.
Such a move will be important for Boeing as Chinese companies have largely stayed on the sidelines since the US started a trade war with China during Trump’s first term.
Trump has brokered many Boeing orders in the past. For example, he received orders worth billions of dollars during his trip to the Middle East last year. These orders came from companies like Emirates, Qatar, and Saudia.
Boeing is making progress as the turnaround continues
Meanwhile, Boeing is making substantial progress as the management executes its turnaround strategy. For one, the safety issues that plagued the company have now ended as no jet has been involved in a Boeing-caused accident in the past few years.
The company has also started increasing its 737 MAX production, a trend that the management believes will continue in the foreseeable future.
Financial results released recently showed that the company’s revenue increased by 57% to $23 billion, while its annual total rose by 34% to over $89 billion.
The company also made a big profit during the quarter, with the net earnings rising to over $8.2 billion. Its operating cash flow rose to over $1.3 billion.
Wall Street analysts are optimistic that Boeing’s business will continue doing well this year. The average estimate is that its revenue will come in at $22 billion this quarter, up by 13% YoY, while its revenue in the next two financial years will be $97 billion and $111 billion, respectively.
Boeing stock price technical analysis
The daily timeframe chart shows that the Boeing share price has recovered in the past few months, moving from a low of $176 in November to a high of $254 in January.
It has retested the key support level at $228, completing a break-and-retest pattern, a common bullish continuation sign.
The stock remains above the 50-day and 100-day Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) has moved to over 50.
Therefore, the most likely scenario is where it rebounds in the coming weeks and retests the important resistance level at $254. A move above that level will point to more gains, potentially to $300.
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