Boeing shares climb after resuming passenger jet production

After three consecutive days of gains, the S&P 500 stocks had a muted opening in Thursday trading. Despite that, Boeing Co.’s shares jumped 4.7% in premarket, which marks the biggest climb among the 30 blue-chip companies in the Dow Index.

The planemaker stated its plans for resuming the production of its passenger jet 737 MAX. This was reported only a few hours after the company announced its massive job cuts, shedding more than 12,000 employees.

Boeing shared that the production of the jet is happening at its Washington plant, although it was not clear when the company resumed its activities. The planemaker is yet to receive permission from the Federal Aviation Administration and other regulatory bodies around the world for the resuming of the production of 737 MAX. Boeing needs to be approved to go into the production of the passenger jet since there were several fatal incidents in 2018 and 2019.

While 5,520 Boeing employees agreed on voluntary redundancy packages, the company announced that it will also lay off another 6,770 of its workers. This measure was a part of Boeing’s plan to reduce its workforce by about 10%. Since the coronavirus pandemic forced airlines to shut down, there was also a huge decline in services related to commercial jets. Naturally, this led to fewer jobs in companies like Boeing, which, in turn, resulted in a huge layoff of employees.

Investors are worried that Boeing might also be affected by the rising tension between China and the US. This is definitely a factor to be considered since, earlier this year, it was stated that China might retrieve all of its Boeing plane orders. This came as a response to the US Commerce Department’s decision to restrict domestic tech markets from accessing Huawei technologies.

Analyst stock price forecast and recommendation

According to CNN Money, 12-month price forecasts for Boeing Co. show that 22 analysts have a median target of $157.00, with a high estimate of $260.00 and a low estimate of $110.00. The median estimate represents a +1.03% increase from the last price of $155.40.

The same media also offers recommendations, based on the data collected by 26 investment analysts. They have a consensus rating of “Hold” for the Boeing Co. stock, with 14 analysts rating the stock as “Hold”, 10 as “Buy”, 1 as ‘Sell” and 1 – as “Outperform”.