Boeing stock is up after the company’s Chief Executive announced that they are now advancing their business case for a new commercial airliner development program. The news, heavily anticipated by both investors and rival companies, has sent Boeing (NYSE: BA) stock upwards, and that momentum could continue into this week.
Why Does a New Boeing Airliner Program Give Confidence to Investors?
It is one of the worlds largest, most profitable, and most stable companies. They are leaders in the Aerospace industry, with Europe’s Airbus (FR: AIR) being the only real competitor in the commercial jetliner market.
The announcement of a new project is big news for investors and the rest of the aerospace industry.
For the last four fiscal years, Boeing has consistently made more than $90B in sales revenue. However, because airliner development projects are typically spaced years or even decades apart, investors haven’t had anything to be overly excited about. In terms of new releases, it has been five years since Boeing announced the 777 series, and 15 years since the 787 Dreamliner, the company’s last flagship project.
This latest announcement has given investors the confidence that the company will start with new R&D that could lead to another period of high public interest, sales, revenue, and profits.
What Do We Know About the Potential Project
Dennis Muilenburg, CEO at Boeing Co., said in a statement that the company is advancing their business case and that “Our plan is to make a launch decision on that airplane in 2019. We still are targeting a 2025 entry-into-service date.”
The plane will be the largest that it has built since the Dreamliner but will still be slightly smaller and less capable in terms of range.
Boeing has already received interest from Ethiopian Air, United Continental Holdings Inc. (United Airlines), and Norwegian Air Shuttle ASA, all of which could become potential operators. Rolls-Royce and Pratt & Whitney have both expressed interest in supplying jet turbines to power Boeing’s new project.
Existing investors should watch this news closely. For those yet to invest in it, this could be the perfect aerospace stock to expand a portfolio.
Stock price is up 0.45% ahead of trading for Monday morning. Value has increased 18.95% in 2018 and 68.24% over the past 12 months.
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