Good news for aerospace stock Boeing (BA), though it might come out a little less intuitively than expected. Apparently, shares are set to sell more briskly than expected, and that was enough to get investors more interested in the shares already out there. Boeing shares were up nearly 2.5% in Tuesday afternoon’s trading.
Yesterday, we heard that Boeing was looking to raise $19 billion through stock sales and depositary shares. Now, that number has increased to $21 billion. Much of this reason, according to a Barron’s report, was that Boeing offered up quite a few more shares than originally projected. Boeing was originally planning to sell 90 million shares. However, that number jumped to 112.5 million shares, priced at $143 per share, which itself represented a 5.1% discount against yesterday’s closing price.
Moreover, that may not be the end of the stock sale, either. Reports noted that underwriters may be able to buy another $750 million worth of depositary shares if they are needed to cover over-allotments. If that goes through, that means another $3.2 billion in Boeing on top of what it already took in, and should go quite a long way toward keeping the lights on and its credit rating from getting turned into junk.
That’s Some Pricey Soap
Yet, even as this bit of good news came out, Boeing once again revealed that it cannot go long without some form of scandal these days. A Reuters report revealed news from the Department of Defense’s Office of Inspector General, which found serious pricing discrepancies in C-17 transport plane spare parts. Apparently, the Inspector General’s office noted, Boeing overcharged the Air Force by as much as 7,943% for something as simple as a soap dispenser.
All told, the report noted, the Air Force overpaid by as much as $1 million for just a dozen parts. The soap dispensers by themselves added up to $149,072 for an “undisclosed number” of dispensers.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 15.36% loss in its share price over the past year, the average BA price target of $194.65 per share implies 26.79% upside potential.
