Troubled aircraft maker Boeing (BA) had almost an unaccountably good day today, up nearly 4% in Thursday afternoon’s trading. That’s good news, but it doesn’t exactly seem supported by the rest of the news out there, as some clear issues have emerged.
First came an update about Boeing’s Starliner project, which has been in space a month longer than it should’ve been. And the “totally-not-trapped-in-space astronauts,” apparently, will not be coming home any time soon. The latest reports say that the two astronauts involved will be staying at the International Space Station until the issues with Starliner itself are actually fixed.
In fact, mission managers are no longer even trying to attach a date to the return of astronauts Suni Williams and Butch Wilmore, with commercial crew program manager Steve Stich declaring, “We’ll come home when we are ready.” However, Stich did note that backup options are in play, starting with the SpaceX Dragon capsule. This would undoubtedly be a blow to Boeing to have SpaceX basically step in and rescue its crew.
A Rising Chinese Competitor?
Anyone who buys large-scale aircraft knows that there are pretty much two options: Boeing and its immediate competitor, Airbus (EADSY). But what if there were more options in the large jet market? That’s a case that China is looking to crack, getting in on a market that’s long been a two-party system. As Cirium’s Rob Morris puts it, “…it is more a case of when rather than if…” someone else gets involved.
The Chinese government is apparently chucking yuan hand over fist at the notion of landing a slice of that market for itself. In fact, reports note that the Chinese government has shelled out around $70 billion worth of subsidies to the current leader in Chinese aerospace, Comac. It recently rolled out the C919, which could rival the 737 MAX and the A320. It’s brought out six planes so far, and has orders for another 1,000 planes waiting in the wings.
Is Boeing Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 16 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 19.8% loss in its share price over the past year, the average BA price target of $215.84 per share implies 16.04% upside potential.
