Boeing (BA) shares were trading around $63 in December and have been trending higher throughout 2012. The stock has been resilient in the face of weak markets, but it has started to pull back, offering investors a chance to buy the dip. Boeing is a global leader in the aerospace and defense industry, and the shares could be poised to resume the uptrend later this year. Here are a few reasons why investors should consider Boeing shares at current levels, and especially on any further dips:
1) Boeing makes the new 787 Dreamliner, which offers the speed and fuel efficiency that major airlines are looking for in an era of rising fuel costs. The 787 Dreamliner has a backlog of orders, and the plane is expected to be put into service by a number of airlines in the coming months.
2) Analysts at Barclays compiled some of their top stock picks for 2012, and they see upside potential of about 37% for the shares. Barclays analysts state:
In our view, the large commercial airplane industry is in the early stages of a multi-year up-cycle driven by sustained demand for travel and the growing need for airplanes, especially from emerging markets.
3) Jim Cramer of CNBC's Mad Money Show, also believes Boeing shares are likely to outperform the Dow Index and CNBC states:
Right now, airlines desperately need to buy the latest fuel-efficient planes in order to reduce sky-high fuel costs.
To Cramer, Boeing is the most obvious way to play this cycle. Cramer also likes Boeing for the dividend, which has potential for future increases.
4) Boeing recently received good news on its new KC-46A refueling plane. According to the U.S. Air Force, this tanker has now completed preliminary design review. This tanker project has a contract value of about $51.7 billion, and if plans proceed as expected, this new refueling plane could enter production in 2013, and boost revenues for Boeing.
Here are some key points for BA: Current share price: $75.40 The 52 week range is $56.01 to $80.65 Earnings estimates for 2012: $4.59 per share Earnings estimates for 2013: $5.70 per share Annual dividend: $1.76 per share which yields 2.3%
Data is sourced from Yahoo Finance No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.