Why Boeing Shares Skyrocketed

Apr. 21, 2020 9:15 AM ETThe Boeing Company (BA)174 Comments


  • Boeing's 15% share price recovery followed after a 7% decline driven by bearish remarks.
  • Assembly lines reopening and guidelines to re-open America for business provided fuel for share price appreciation.
  • While re-opening for business is a positive, the demand profile remains weak at best without clear timeframes that could provide stimulus to share prices.
  • I do much more than just articles at The Aerospace Forum: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

On Friday, the 17th of April, shares of Boeing (NYSE:BA) gained almost 15% vs. the 2%-3% for the markets. On the same day, I published a report outlining the cancellations in Boeing’s latest order book update. It was quite a significant decline, in excess of 300 units (a mix of contractual cancellations and expected future cancellations). However, with Boeing’s share prices surging the obvious remark I received was why Boeing shares were surging. That's a question I will answer in this analysis.

Boeing COVID-19 Seeking Alpha Dhierin Bechai

Source: Boeing

Opening Up America Again

What provided a broader impulse to the markets were a set of guidelines for opening up America again. This would be a staged process, which tests whether staging criteria are met at each stage. This phased opening up would happen at the discretion of local authorities. Obviously with many of the things that President Trump proposes it will attract criticism including that from readers on Seeking Alpha. With this being an election year, it's in the president’s interest to resolve the COVID-19 crisis, which would not be a full economic recovery but a sense of recovery in which we pick up our lives again but in a prudent way. It's in the president’s interest for re-election, but also the people, to see this being rolled out in a prudent way.

President Trump Boeing COVID-19 Seeking Alpha Dhierin Bechai

Source: VOX

There will be expectations on when states can re-open for business as President Trump shared that 29 states could be opening soon, but the most important part of this, whether you agree with President Trump or not, is that the framework to return to normal life (to the extent you can call it normal life) is there. It shows that there's a plan or a timeframe and in uncertain times like these that provides support to the markets. We’ve been seeing outlines for a very slow re-opening

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This article was written by

Dhierin Bechai profile picture
In-depth insights from an expert on the aerospace and airline industries
Dhierin is a leading contributor covering the aerospace industry on Seeking Alpha and the founder of The Aerospace Forum. With his Aerospace Engineering background he has a more indepth knowledge about aerospace products enabling him to cover a complex niche. Most of his reports will be about companies in the aerospace industry or airlines industry, comparing products and looking at market forecasts providing investors with unique and thorough insights. Dhierin has accumulated nearly 20 million views never failing to spark healthy and thoughtful discussions for investors and aerospace professionals.

His reports have been cited by CNBC, the Puget Sound Business Journal, the Wichita Business Journal and National Public Radio. His expertise is also leveraged in Luchtvaartnieuws Magazine, the biggest aviation magazine in the Benelux.

AeroAnalysis offers wide variety of services, ranging from providing data and cost models to consultancy possibilities. Check out our website for more information. Though we believe in the strong nature of our analysis, we are in no way giving buy or sell recommendations and advise everyone to do their own due diligence before making investment decisions.

Disclosure: I am/we are long BA, EADSF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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