Boeing shares touch a fresh all-time high on Wednesday, analysts see more upside for the stock this year

January 11, 2018 8:34 am

Shares of Boeing Company (BA) extended gains at the start of the new year, one day after the plane maker announced 912 new aircraft orders and the delivery of record 763 jetliners during 2017. This gives a group of analysts a reason to expect more upside for Boeing’s stock in 2018.

Boeing shares closed higher for a fourth consecutive trading session on Wednesday. The stock went up 0.57% ($1.83) to $320.26, after touching an intraday high at $322.14 and also a fresh all-time high.

In the week ended on January 7th the shares of the aircraft maker added 4.72% to their market value compared to a week ago, which marked the seventh gain out of eight weeks. It has also been the strongest performance since the week ended on December 10th.

The stock has extended its advance to 8.60% so far during the current month, following a 6.54% surge in December. The latter has been a fourth straight month of gains.

For the entire past year, the shares of the NYSE-listed plane manufacturer rose 89.43% following another 7.67% surge in 2016.

“We believe Boeing shares are still moderately undervalued, particularly if the company can sustain free cash flow margins in the 13-15 percent range”, Charles Smith, the founder of Fort Pitt Capital Group, was quoted as saying by Reuters.

“Given our expectations for moderation in capex over the next couple years, along with continued efficiencies on the 787 Dreamliner, we think this can happen”, he added.

Smith also projects a return on equity of 17%-18% for Boeing shareholders, which gives its shares a “fair value” estimate for the current year of $300-$360.

At the same time, Rajeev Lalwani of Morgan Stanley projects “another plus-50% year” for the plane maker, in case its management ensures another year of growth, the company’s free cash flow multiples catch up with peers and the US tax reform materializes.

However, Boeing will have to deal with short-term challenges, such as its problematic aerial tanker refueling program, as well as with macroeconomic and possible supply chain issues in a longer term, according to Lalwani.

“It’s a bull market and Boeing is a classic kind of late stage bull market stock – mega cap, high quality, global orientation”, said asset manager Kenneth Fisher, whose firm owned approximately $70 million of Boeing stock as of October 17th, according to data by Reuters.

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Boeing Company’s stock price, have a median target of $305.00, with a high estimate of $350.00 and a low estimate of $203.00. The median estimate is a 4.76% decrease compared to the closing price of $320.26 on January 10th.

The same media also reported that 13 out of 25 surveyed investment analysts had rated Boeing Company’s stock as “Hold”, while 10 – as “Buy”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the Boeing stock are presented as follows:

R1 – $320.87
R2 – $321.48
R3 (Range Resistance – Sell) – $322.09
R4 (Long Breakout) – $323.91
R5 (Breakout Target 1) – $326.04
R6 (Breakout Target 2) – $327.00

S1 – $319.65
S2 – $319.04
S3 (Range Support – Buy) – $318.43
S4 (Short Breakout) – $316.61
S5 (Breakout Target 1) – $314.48
S6 (Breakout Target 2) – $313.52

By using the traditional method of calculation, the weekly levels of importance for Boeing Company (BA) are presented as follows:

Central Pivot Point – $304.38
R1 – $313.35
R2 – $317.87
R3 – $326.84
R4 – $335.82

S1 – $299.86
S2 – $290.89
S3 – $286.37
S4 – $281.86

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