Good news for Boeing (BA) today, as the beleaguered aircraft maker managed to finally pick a new CEO. And Boeing investors took the news of the new CEO to heart, sending shares up over 4.5% in Monday afternoon’s trading.
The debate about who Boeing would pick was substantial, and several possible candidates emerged. But ultimately, Boeing turned to Kelly Ortberg, who really only emerged as a potential candidate just two days ago.
Ortberg, the former CEO of aerospace company Rockwell Collins, will be going to Seattle, where he will be stationed. In fact, some are starting to suggest that this is a sign that Boeing will pull its headquarters out of Virginia and return to Seattle, where much of its operation is located. Ortberg’s status as an “outsider” candidate came as good news to many, who believed that Boeing needed someone outside the company to take the top slot and drive home the point that Boeing is fundamentally changed, top to bottom.
Boeing’s Biggest Profit Driver? Fixing Its Own Planes
That was good news, but what came crawling out of Boeing’s earnings report was a bit of a disaster in and of itself. Reports note that—and brace yourself for this one—Boeing had basically one source of profitability right now: fixing its own aircraft. Yes, Boeing’s services division was the only one that could actually drag a profit up from the muck.
It’s clear something needs to turn around, and fast. That’s what makes Kelly Ortberg’s ascension to the top of Boeing particularly helpful; Boeing needs to turn around, and by hiring an outsider, it’s demonstrated a proclivity and a plan to do exactly that.
Is Boeing a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After an 18% loss in its share price over the past year, the average BA price target of $215.84 per share implies 10.35% upside potential.
