Boeing (BA) – Get report The shares widened earnings on Wednesday, testing the highest levels in more than a year, following a $ 30 billion aircraft lease agreement between General Electric (GE) – Get report and AerCap that Jim Cramer says can trigger more moves on the positive side.
GE said on Wednesday that AerCap will purchase all of its GE Capital Aviation Services, most of its GE Capital division and also known as GECAS, for $ 24 billion in cash, 111.5 million in AerCap shares and plus $ 1 billion that could be paid in cash or notes.
The transaction would leave GE with a 46% shareholding in the combined group, which will have about 2,600 commercial aircraft in service, stored or ordered from major operators around the world.
Boeing said on Tuesday that its net order book was positive for the first time in more than a year last month, with 86 gross orders controlled by 39 new orders for the 737 MAX. This puts Boeing’s total order book at 4,041 aircraft at the end of February.
Boeing’s February count was well above the total of 11 new orders reported by its European rival, Airbus (EADSY) , which was led by a reservation of 10 new A320 aircraft from an unidentified customer. It also suggests to the founder of Street, Jim Cramer, that the race for Boeing’s shares “started” even though “analysts still haven’t recognized it.”
“Boeing surpassing Airbus sales is the beginning of the long-awaited return. I think AerCap, an experienced operator, wants to be bigger because it feels the boom coming from travel,” said Cramer.
Boeing shares rose 5.2% in Wednesday’s early afternoon trading and changed hands at $ 242.60 each, driving its six-month gain to more than 50% and close to a one-month high. year of $ 244.08 that the shares reached on December 7.
United airlines (UAL) – Get report said last month that it bought 25 new 737 MAX jets, which were released to return to service by the Federal Aviation Administration at the end of last year, and postponed delivery of 40 of the previously ordered planes to 2022.
Boeing delivered 18 737 MAX jets in February, the company said, most of its total of 22 commercial planes in the month.
Canaccord Genuity analyst Ken Herbert said earlier this week that a better outlook for aircraft orders in the second half of the year will be a ‘positive catalyst’ for Boeing shares as he raised his rating on the shares to a ‘buy’ with a target price of $ 275.00.
He also noted that rising market interest rates will be less of an obstacle for Boeing, as they will be seen more as a sign for a recovery for commercial airlines than as a component of rising production costs.
“Although BA’s widebody franchise takes much longer to recover, we see stability in construction rates for the 787 and 777 in 2022-2023,” said Herbert. “However, we believe that an increase in air travel and the continued stimulus will allow BA to see an increase in orders after several quarters or very low activity.”
“There is a risk to the order book of ~ 300 777X, but we believe that this is well understood by investors,” he noted.
Boeing delayed the launch of its 777X widebody in late January, after recording a larger than expected loss of $ 15.25 per share in the three months ending in December.
Group revenues, the company said. fell 14.5% to $ 15.3 billion, but exceeded analysts’ estimates of $ 15.07 billion. Free cash flow, however, was measured at -4.274 billion.