On a day that was already looking pretty good for Boeing
First up, Southwest Airlines
That may not sound like much, compared with some of the other announcements Boeing has made lately. After all, its 777 deal with Emirates Airlines last month was for a reported $18 billion, and the sale of 230 737 MAXes to Indonesia's Lion Air could ultimately be worth $35 billion at list prices.
On the other hand, word has it that the Lion Air sale netted Boeing only about $95 million per plane after discounts. You have to figure Boeing sliced a substantial sum off its asking price to bag that order, Boeing's biggest ever. It seems logical, therefore, that the company will get a better profit margin on its smaller sale to Southwest.
When it absolutely, positively has to be profitable overnight
Boeing's third piece of big news today is the potential purchase by FedEx
So where does this leave us? All told, Boeing has either confirmed, or looks likely to confirm, as much as $20 billion in new revenues (at list price.) That's close to a third of the value of the company's annual revenue stream, all announced in the space of about 24 hours. Not bad for a day's work.
But does it make Boeing a buy? Perhaps. At 14 times earnings, Boeing still looks pricey for the 13% annual growth rate Wall Street has assigned it. If Boeing keeps putting up big sales numbers, though, and that growth rate accelerates, the stock might finally descend into bargain territory.