“Quadruple Production”: Boeing Stock (NYSE:BA) Jumps as Demand Surges

Aerospace stock Boeing BA +2.35% ▲ found itself in an interesting position recently, as demand seemed to visibly outstrip supply in another area, military aircraft. President Trump recently called on Boeing and other defense industry providers to “quadruple production,” so that they could “…reach, as rapidly as possible, the highest levels of quantity.” That call gave Boeing investors a lot of hope, and Boeing stock surged up over 2% in Friday afternoon’s trading.

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Boeing did not publicly comment on Trump’s call for vastly increased production. It likely could not, reasonably, without pointing out that the Federal Aviation Administration (FAA) has strict production limits in place on some of Boeing’s product line. Boeing did confirm it was at the meeting where the huge production ramp-up was called for, but would not comment further.

With several Boeing products already in the Middle East, including multiple tanker types and the EA-18G Growler attack aircraft, Boeing’s ability to step up production on these might be somewhat limited. But it is safe to say that, right now, there is roughly as clear of demand for Boeing’s military hardware as there is for its commercial aircraft.

A Big Contract Change

Boeing has pulled in plenty of new military contracts of late, and the United States Air Force recently modified another contract that offered a big new payout. Two contract modifications worth a reported total of $2.43 billion arrived for work involving the E-7A, bringing the contract’s total value to about $4.91 billion.

The E-7A is an early warning and control aircraft, reports note, also known as the “Wedgetail.” We have heard news about the Wedgetail before, so it seems pretty clear that the United States will be sticking with this aircraft for some time to come.

Is Boeing a Good Stock to Buy Right Now?

Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 13 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 26.54% rally in its share price over the past year, the average BA price target of $276.36 per share implies 32.19% upside potential.

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