Is Boeing Stock is Ready for Lift-Off ?


Aerospace giant Boeing (NYSE: BA) Shares have rallied strongly from their post-pandemic lows at $113.02 to pare their losses for the year to (-24%). Although Boeing was crushed by the pandemic, it is reaping the benefits of the recovery in the epicenter’s travel industry. The company saw an increase in demand for commercial aircraft as commercial traffic accelerates to the highest levels since before COVID-2019 in both North America and Europe as China remains backward Major airline customers include Southwest Airlines (NYSE: LUV ), Delta Air Lines (NYSE: DAL ) and United Airlines (NYSE: UAL ). Boeing also posted positive cash flow of $100 million, which is a big improvement from a year ago. The company expects positive cash flow for the remainder of 2022. The company is awaiting Federal Aviation Administration (FAA) clearance to begin deliveries of the 787. The company has a portfolio of 372 billion dollars that includes more than 4,200 commercial aircraft. There is heavy speculation that Boeing will return to profitability in the third fiscal quarter of 2022 as it emerges from the 737 MAX disaster. The company is ready to turn the corner and come out stronger. Headwinds remain, including supply chain constraints, logistics, raw material costs, inflationary pressures and high fuel costs. However, Boeing is very optimistic about the recovery in air traffic, which is increasing demand for its planes as airlines once again increase their fleets. Cautious investors looking for exposure to the recovery in air travel can look for opportunistic pullbacks in Boeing.



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Publication of results for the second quarter of the 2022 financial year

On January 19, 2022, Boeing released its fiscal second quarter 2022 results for the quarter ending June 2022. The company reported an earnings per share (EPS) loss of ($-0.37 ) excluding non-recurring items compared to consensus analyst estimates. for a loss of ($-0.10), an error ($-0.27). Revenue fell (-1.9%) year-over-year (y-o-y) to $16.68 billion, missing analysts’ estimates of $17.53 billion. The company achieved positive operating cash flow of $100 million. The total backlog of more than 4,200 commercial aircraft orders increased to $372 billion. The company increased 737 production to 31 per month and is awaiting FDA clearance for 787 deliveries. Boeing CEO Dave Calhoun commented, “We made significant progress on key programs in the second quarter and are building momentum in our turnaround. As we begin to meet key milestones, we have been able to generate a positive operating cash flow this quarter and remain on track to achieve positive free cash flow by 2022. While we are making significant progress, we have more work ahead of us. We will remain focused on safety, quality and transparency, as we drive stability, improve performance and continue to invest in our future.”

Takeaway calls

CEO Calhoun began with a summary of the Farnborough Air Show that witnessed the 777X in flight and its investment in the eVTOL market through Wisk. They met with suppliers, customers and partners and collected more than 200 orders and commitments that week for their full line of aircraft, from the 737MAX to the 777X. He underlined the anticipation of flight renewal projects. Customers are busy improving their fleets in the face of supply chain constraints. He noted many positives during the quarter, including incredible performance on the 737 MAX and being close to delivering the 787 after FAA clearance. They are prioritizing supply chain predictability by focusing primarily on engine supply lines and the constraints faced by engine suppliers. The business services business increased by 30% with strong margins. Operating cash flow has turned positive earlier than expected and is expected to remain positive through calendar year 2022. Supply constraints do not prevent increased customer demand as they rebuild its aircraft fleets for the future to meet significant passenger demand. COVID is slowing down China, but coupled with geopolitical excess should not affect the positive cash flow stance that was taken for the year. Global services are coming back in a “big way”.

BA Opportunistic withdrawal levels

Using rifle charts on weekly and daily timeframes provides an accurate view of the playing field for BA shares. The weekly uptrend on the rifle chart was in a double top near $163.35 Fibonacci level (fib).. The weekly breakout on the rifle chart has a 5-period moving average (MA) support rising at $148, followed by the 15-period MA support at $142.62. The 50-period weekly MA stands at $186.81. The weekly stochastic formed a mini bull that went up around 40. The weekly Low Market Structure (MSL) buy activated on break above $140.70. The daily uptrend is halted on a reversal or breakout as the 5-period MA starts to drop to $156.40 with a rising 15-period MA at $151.18. The daily stochastic has dropped around 80. The 200 period daily MA is $181.78. The daily upper Bollinger Bands (BB) is at $170.06. The 50-period MA daily support is $138.37. The lower BBs are at $125.76. Cautious investors can watch for opportunistic pullback levels at $147.18, $144.65, $140.70 MSL weekly trigger, $135.59 fib, $130.33 fib, $127.01, $121.49 fib and $120.05 fib. The upward trajectories range from $174.07 fib to the $202.93 fib level.



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