While aerospace stock Boeing (BA) has had its share of reversals of late, today was unquestionably a win, and investors responded accordingly. Boeing landed a major government contract to produce the F-47 fighter, building the next generation of American air power. That was good enough for shareholders, who bought in hard, sending shares up nearly 5% Thursday afternoon’s trading.
The contract in question calls for Boeing to build what amounts to “a lot”, as noted by President Trump, of the new F-47 fighter. In fact, Boeing will likely see brisk demand for the fighters in question. Not only is there a contract from the Air Force, valued at around $20 billion, but again as Trump put it, “Our allies are calling constantly. They want to buy them also.”
Boeing managed to beat out a close competitor, Lockheed Martin (LMT) for the contract, likely on the strength of its technical package. While key details about the F-47 could not be revealed for perhaps the most obvious of security reasons, reports do suggest that the F-47 would include “…stealth, advanced sensors, and cutting-edge engines.” Air Force Chief of Staff General David Allvin noted that the F-47 would actually cost less than the F-22, which means that more of them would be in the inventory.
A Drone Supplement
Reports also noted that Elon Musk, who is currently considered a “special government employee,” has been in favor of replacing crewed aircraft with drone technology for some time now. But the F-47 may actually prove to be kind of an intermediary between the two, reports note.
The F-47, according to reports, will be a “drone coordinator,” a “…sixth-generation fighter…supported by sophisticated robotic wingmen.” The F-47 will also be part of the larger Next Generation Air Dominance (NGAD) plan, which would see more intermingling with autonomous systems. The move to put the NGAD system in place apparently goes back to the last administration, which hemmed and hawed and, ultimately, passed on the system until the new administration.
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 14 Buys, four Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 4.23% loss in its share price over the past year, the average BA price target of $197.47 per share implies 9.63% upside potential.
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