Tuesday, February 27, 2024

Boeing Stock Takes Off On United Airlines Deal Buzz

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Boeing (BA) took off on Friday after the Wall Street Journal reported the airplane producer is close to a deal with United Airlines (UAL) for dozens of 787 Dreamliner jets. Boeing stock rose Friday following the news while UAL stock was flat on the day.

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United Airlines is preparing to order around 100 planes to replace its aging widebody jets and Boeing 767 fleet that experienced operational issues over the last year, the WSJ reported. The Chicago-based airline’s securities filings list more than 50 Boeing 767s across its hangers.

It’s unclear how many Dreamliner jets that United would order in the deal, which could close as soon as this month. But people familiar with the late-stage talks say it could include confirmed orders and future purchase options for 50 or more aircraft.

United, Boeing and European plane maker Airbus (EADSY), which competed in the deal, declined to comment on the rumors.

The aircraft in the 787 Dreamliner family range from roughly $248 million to $338 million before discounts depending on the model. Boeing currently has a backlog of 4,441 planes, including 488 orders for its 787 Dreamliners, according to the company website.

Boeing Stock

BA stock ascended 4% to 182.87 on Friday, hitting its best level since April. Shares are now just past the 5% chase zone from a 173.95 buy point for a cup base. Boeing stock had been consolidating in the buy zone, which runs up to 182.65. after breaking out on Nov. 11.

Investors could still buy BA stock, using the short term highs around 179-180 as an alternate entry.

The relative strength line is at its best levels since February, reflecting Boeing stock’s outperformance vs. the S&P 500 index. The stockhas an 87 RS Rating out of a possible 99, indicating strong performance compared to its peers in the S&P 500.

United Airlines held at 43.89 by market close, continuing to find support at the 21-day line. UAL stock is not far from a cup-with-handle buy point of 45.67.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

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