Aerospace giant Boeing (NYSE: BA) stock has rallied strong off its post-pandemic lows at $113.02 to cut its losses on the entire year to (-24%). As the pandemic crushed Boeing, it really is reaping the advantages of rebound in the epicenter travel industry. THE BUSINESS saw demand spike for commercial aircrafts as commercial traffic accelerates to the best levels since pre-COVID 2019 in both THE UNITED STATES and Europe as China lags. Major carrier customers are the like of Southwest Airlines (NYSE: LUV), Delta Air Lines (NYSE: DAL), and United Airlines (NYSE: UAL). Boeing also recorded positive cashflow of $100 million that is a vast improvement from the year ago. THE BUSINESS expects positive cashflow for the others of 2022. THE BUSINESS is waiting on the Federal Aviation Administration (FAA) clearance to start out deliveries on the 787. THE BUSINESS includes a backlog of $372 billion which include over 4,200 commercial airplanes. There’s heavy speculation for Boeing to come back to profitability in fiscal Q3 2022 since it emerges from the 737 MAX disaster. THE BUSINESS is preparing to turn the corner and emerge stronger. You may still find headwinds including supply chain constraints, logistics, recycleables costs, inflationary pressures and high fuel prices. However, Boeing is quite bullish on the recovery in air traffic that is bolstering the demand because of its planes as airlines go back to ramping up their fleets. Prudent investors searching for exposure in the recovery of flights can search for opportunistic pullbacks in Boeing.
Q2 Fiscal 2022 Earnings Release
On Jan. 19, 2022, Boeing released its fiscal second-quarter 2022 results for the quarter ending June 2022. THE BUSINESS reported an earnings-per-share (EPS) lack of (-$0.37) excluding non-recurring items versus consensus analyst estimates for a lack of (-$0.10), a (-$0.27) miss. Revenues fell (-1.9 %) year-over-year (YoY) to $16.68 billion missing analyst estimates for $17.53 billion. THE BUSINESS reached positive operating cashflow of $100 million. Total backlog including over 4,200 commercial airplane orders rose to $372 billion. THE BUSINESS increased production of 737s to 31 monthly and waiting on FDA clearance for 787 deliveries. Boeing CEO Dave Calhoun commented, “We made important progress across key programs in the next quarter and so are building momentum inside our turnaround. Once we commence to hit key milestones, we could actually generate positive operating cashflow this quarter and stick to track to attain positive free cashflow for 2022. While we have been making meaningful progress, we’ve more work ahead. We shall stay centered on safety, quality and transparency, once we drive stability, improve performance, and continue steadily to spend money on our future.”
Conference Call Takeaways
CEO Calhoun began with a recap of the Farnborough Air Show witnessing the 777X in flight and its own investment in the eVTOL market through Wisk. They met with suppliers, customers, and partners and collected over 200 orders and commitments that week because of its full type of planes from the 737MAX to the 777X. It underscored the anticipation of flight renewals projects. They customers are busy and beefing up their fleets when confronted with supply chain constraints. He noted many positives in the quarter including incredible performance of the 737 MAX and being on the verge of delivering the 787 upon clearance from the FAA. They’re prioritizing the predictability of the delivery chain focusing mainly on the engine supply lines and the constraints engine suppliers are facing. The commercial service business was up 30% with strong margins on top of that. Operating cashflow has turned positive before plan and likely to remain cashflow positive through twelve months 2022. Supply constraints aren’t deterring the increasable demand from customers as their rebuild their airplane fleets for future years to meet up significant demand from passengers. COVID is slowing China nonetheless it alongside geopolitical overhang shouldn’t impact the money flow positive posture its taken on the entire year. Global services is coming back a “big way”.
BA Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames offers a precision view of the playing field for BA stock. The weekly rifle chart uptrend devote a double top close to the $163.35 Fibonacci (fib) level. The weekly rifle chart breakout includes a 5-period moving average (MA) support rising at $148 accompanied by the 15-period MA support at $142.62. The weekly 50-period MA sits at $186.81. The weekly stochastic formed a mini pup rising through the 40-band. The weekly market structure low (MSL) buy triggered on the breakout above $140.70. The daily uptrend is stalled right into a make or break because the 5-period MA starts to slope down at $156.40 with rising 15-period MA at $151.18. The daily stochastic has fallen through the 80-band. The daily 200-period MA sits at $181.78. The daily upper Bollinger Bands (BBs) sit at $170.06. The daily 50-period MA support sits at $138.37. The low BBs sit at $125.76. Prudent investors can observe for opportunistic pullback levels at the $147.18, $144.65, $140.70 weekly MSL trigger, $135.59 fib, $130.33 fib, $127.01, $121.49 fib, and the $120.05 fib. The upside trajectories add the $174.07 fib up towards the $202.93 fib level.
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