Boeing Stock Gets Lift on Layoff Buzz

The Dow component has been trading sideways for the past couple months

Digital Content Manager
May 27, 2020 at 9:53 AM
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The shares of Boeing Co (NYSE:BA) are up 3.1% at $142.27 this morning on news the aerospace giant will announce around 2,500 voluntary job cuts this week, according to a spokesman for the Society of Professional Engineering Employees in Aerospace (SPEEA) union. This round of layoffs is the first in a larger plan to lower its roughly 160,000 employee count by about 10%. 

Boeing hasn't been as lucky as some other blue chips boasting a more V-shaped recovery. The stock has been stuck trading between the $120 and $145 regions since early April, with its late-March attempt to break free from its seven-year lows suffered earlier in the month. For the year, BA is down over 50%, though it did manage to topple its 50-day moving average earlier this week. 

Most members of the brokerage bunch covering BA have been cautious about the security, with 10 of the 15 in coverage calling it a "hold." Plus, the consensus 12-month price target is a slim 6% premium to last night's close. 

Meanwhile, calls have been quite popular in the options pits. In the last 10 days, 1.63 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio that sits in the 80th percentile of its annual range. It is possible some of this call buying could be shorts hedging against any unexpected upside risk, however. In the last two reporting periods alone, short interest is up 50.3%. 

 

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