Orders raining for Boeing, Deutsche bank upgrades PT

Last week, the stock of Boeing Co (NYSE: BA) gained about $10 to record a new yearly high of $256.69. The company has received a series of large orders, including the one from the US government, in September. That was the prime reason for the rally in the stock price.

Considering the prospects of receiving additional multi-billion dollar contracts from the Malaysian government, analysts have raised their price targets.

Thus, as discussed below, we anticipate the stock of Boeing, which closed at $256.45 on Friday, to rally further in the days to come.

On September 13th , the Chicago, Illinois-based Boeing received a $499 million contract from the US Air Force to begin the preliminary design of the future Air Force One aircrafts.

Boeing

Under the contract, Boeing will modify commercial Boeing 747 and integrate military-specific communication systems. Even medical facilities and self-defense systems will be redesigned. The electrical power systems will be upgraded. The modified aircraft will also have an executive interior and autonomous ground operations capabilities. Notably, in August, the Air Force had placed an order for the purchase of two previously built 747-8 airliners at a nominal rate.

A day earlier (Sep 12th ), Malaysia Airlines Bhd signed an MoU with Boeing for the purchase of 16 aircrafts. Boeing already had an existing order for eight 737 MAX airplanes from the Southeast Asian nation. That was now incremented to eight 787-9 Dreamliners and eight 737 MAXs (purchasing rights). The total value of order is about $3.06 billion. As of date Boeing has firm orders for 25 737s aircrafts from Malaysia Airlines. Everything else is optional.

Furthermore, news has emerged that Boeing and Malaysian Airlines are negotiating a 12-yr maintenance and service contract worth RM5 billion. The month of September has gone very well for Boeing. In early September, the company announced that it has received a contract for Aerospace Systems Air Platform Technology Research program from the Pentagon. The contract has a ceiling value of $499 million. Boeing is one of the six companies which were awarded the contract.

Under the contract, Boeing will be responsible for providing quality research for the development of affordable war fighter with never seen before capabilities. Boeing anticipates to finish the task by August 31, 2025, at the Hazelwood, Massachusetts facility.

On the basis of the above discussed developments, Deutsche bank analysts raised the price target of Boeing to $300, from $280 issued earlier. Likewise, Sanford C. Bernstein has increased the price target from $274 to $303. Thus, we expect the stock to move up further in the days to come.

The stock has started rising after consolidating at 244 levels. The accumulation indicator is also making new highs. Furthermore, the stock seems to be forming an AB=CD pattern. Thus, we expect the current rally to take the stock price to about $275.

A call option is well suited to trade such an uptrend. We may enter the trade when the stock changes hands at about $256. A contract expiring on October 3rd is ideal for the trade.