A Boeing 787-9 Dreamliner
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Boeing stock is rising faster than the market after an analyst launched coverage with a Buy rating.
Boeing (ticker: BA) stock is up 4.4% in early trading Wednesday. The S&P 500 and Dow Jones Industrial Average are up 2.1% and 2%, respectively.
Langenberg analyst Brian Langenberg initiated coverage of the commercial aerospace giant with a Buy. Langenberg didn’t immediately respond to a request for comment about his coverage launch.
But he believes commercial air traffic will continue to recover, and thinks international air travel can reach 75% to 80% of normal by the end of 2022, according to reports.
Declining air traffic has been an issue for the entire aerospace sector since the Covid-19 pandemic began. Over the past month, U.S. air traffic is down about 15% from prepandemic levels, according to Transportation Security Administratiion data. For all of 2021, U.S. air travel was down about 25% compared with prepandemic levels. In 2020, traffic was off almost 40% versus pre-Covid times.
International travel has been slower to recover than domestic travel. In 2021, international air traffic was down roughly 75% compared with 2019 levels, according to International Air Transport Association data.
The slow traffic recovery has hindered airline earnings. It has also hampered new plane sales. As traffic recovers the entire aerospace industry, including Boeing, can benefit.
With the new Buy rating, about 76% of analysts covering Boeing stock have Buy ratings. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.
That’s a reversal from a year ago. Back then, only about 52% of analysts rated Boeing stock at Buy.
Wall Street is getting more bullish even as the stock struggles. Boeing stock is down 10% year to date and 21% over the past year.
Write to Al Root at [email protected]
