What happened
On Monday, Boeing (BA 2.55%) secured a massive new order, including a key win for a troubled new program. That helped push the stock up about 5% on a good day on Wall Street.
So what
Boeing has had its troubles in recent years, including issues related to its 737 MAX and a broader aviation slowdown due to the pandemic. The company's 777 program, though less prominent, has also had its share of troubles. One customer accounts for about one-third of the order book for the new version of the 777, and that customer has voiced concerns about the plane due to development delays.
A rendering of the Boeing 777-8 freighter. Image source: Boeing.
On Monday, Qatar Airways signed on as the launch customer for a cargo version of the new 777, ordering up to 50 freighters. The deal came as part of a broader order for up to 50 737s that is worth about $20 billion at list prices.
Stan Deal, CEO of Boeing Commercial Airplanes, called the 777 order "a testament to our commitment to provide freighters with market-leading capacity, reliability and efficiency."
Large customers almost never pay list prices, meaning the deal is likely worth far less to Boeing than $20 billion. But it is still important from a symbolic basis, and is a good sign that Boeing is still moving metal even as the airline industry tries to rebuild post-pandemic.
Now what
The news comes on the same day that Jefferies analyst Sheila Kahyaoglu lowered her price target on Boeing to $270 from $300, citing what could be a tight near-term cash flow outlook as Boeing attempts to work through its inventory and get 737s and other planes to customers. In its annual report, which was also filed Monday, Boeing mentioned that tensions with Russia are creating an adverse climate for its business, another challenge for the aerospace giant.
BA data by YCharts.
Boeing shares lost more than half their value in the early days of the pandemic, and though they have recovered most of that decline, they are still well below where they traded in 2019. Investors are currently in a holding pattern, with the stock seemingly comfortably off of its lows without much risk of heading back to the crisis levels, but with a lot of headwinds still out there keeping the stock from soaring.
In the meantime, the shares are likely to trade up on positive news and good days and down on setbacks or rough market conditions. Such was the case on Monday, with the shares riding high off of the Qatar announcement.
