Boeing Shares Move Higher As Q2 Report Beats Analyst Expectations
Shares of Boeing gained strong upside momentum after the company reported its second-quarter results. Boeing reported revenue of $17 billion and GAAP earnings of $1.00 per share, easily beating analyst estimates on both earnings and revenue. The company’s operating cash flow was -$483 million, which also exceeded analyst expectations.
In its press release, Boeing noted that commercial market environment continued to improve, but the company was closely monitoring COVID-19 case rates.
The company stated that it continued work on the issues with the 737 MAX and 787 programs, which have put some pressure on the stock this year. According to Boeing, the 737 program is producing at a rate of about 16 per month and is expected to reach a production rate of 31 per month in early 2022. The 787 production rate will be temporary lower than five per month and then gradually return to this rate while the company is conducting inspections and rework.
What’s Next For Boeing Stock?
Analysts’ earnings estimates for 2021 have declined in recent months, and analysts expect that Boeing will report a loss of $1.37 per share. However, these estimates will likely be revised after the strong quarterly report.
In 2022, Boeing is expected to report a profit of $5.46 per share, so the stock is trading at 43 forward P/E, which looks rather expensive even in the current market environment.
However, a strong quarterly report shows that Boeing’s business continues to rebound after the blow dealt by the coronavirus pandemic, so traders will stay focused on the company’s future trajectory and will be ready to look beyond 2022.
In this light, Boeing’s rich P/E multiple looks sustainable unless the company encounters additional problems with its airplanes. Earnings estimates for Boeing will likely move higher in the upcoming weeks, which may provide additional support to the company’s shares.
For a look at all of today’s economic events, check out our economic calendar.