Boeing Stock Takes Flight Following 737 Max Grounding Lift Update

Analysts are split on their stance for BA

Deputy Editor
Nov 23, 2020 at 10:54 AM
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Blue-chip Boeing Co (NYSE: BA) received some good news today. A week after the U.S. Federal Aviation Administration (FAA) officially ungrounded the aerospace giant's 737 Max jet, European Union Safety Agency Executive Director Patrick Ky deemed it safe to fly, and added the agency will lift its grounding order for the jet in January. As a result, the shares of Boeing stock were last seen up 1.5% to trade at $202.57.

BA tumbled back in September after Impresa, one of the company's suppliers, filed for bankruptcy protection as a result of the Max jet's crashes, and then fell below the $145 level in late October when a rise of global coronavirus set in. The equity has staged a comeback since then, hitting $223.02 last week, its highest level since May, with support from its ascending 10-day moving average. Longer term, the security has shed 37.6% in 2020.

Meanwhile, analysts are divided on the equity. Of the 16 in coverage, seven sport a "buy" or better rating, while nine call it a tepid "hold" or worse. Plus, the security's 12-month consensus target price of $200.55 is a 1.9% discount to current levels.

Lastly, the stock’s Schaeffer’s Volatility Index (SVI) of 49% sits higher than just 13% of all other annual readings. This means options traders are pricing in relatively low volatility expectations at the moment -- a boon for premium buyers. Plus, Boeing stock’s Schaeffer’s Volatility Scorecard (SVS) ranks at a relatively high 81 out of 100, meaning the equity has tended to exceed these expectations.

 

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