Tags: boeing | defense | stock | 20 percent | surge | year

Boeing 'Standout Defense Stock of Year' Can Surge Another 20 Percent

Close-up of front section of the new Boeing 747-8
(Richair/Dreamstime)

By    |   Friday, 28 September 2018 01:37 PM EDT

An expert strategist reportedly predicts Boeing is the “standout defense stock of the year” and can surge another 20%.

"This has been the standout defense stock of the year here. We're in a beautiful 2018 consolidation in [Boeing]," Todd Gordon, founder of TradingAnalysis.com, recently told CNBC.

"There is so much pent-up demand in this stock, I think it's ready to — sorry for the pun — take off," Gordon said.

Boeing could surge next year to a target of $442 per share, or 20 percent from levels seen on Thursday.

Near midday Friday, Boeing stock (BA) was at $372.20, up $4.86, or 1.3 percent.

"Obviously, we've got a lot of wood to chop, a lot of resistance, a lot of overhead supply. When the shorts who were leaning against this upside ceiling get caught, they say 'Oh no,' and they scramble to get out of those shorts. That creates the short squeeze, that brings in the momentum guys, and that should get us up to that $442 target, he said.

To be sure, Boeing has had some good news this week.

Boeing was selected to build the U.S. Air Force’s next training jet in a contract worth up to $9.2 billion over the life of the program, the Air Force said on Thursday.

Boeing teamed up with Sweden’s Saab AB (SAABb.ST) to develop a new plane for the competition, beating out Lockheed Martin Corp (LMT.N) and Leonardo DRS (LDOF.MI).

The Air Force currently plans to purchase 351 of the jets and 46 simulators. Additional purchase options on the $9.2 billion contract, first reported by Reuters, could allow the Air Force to buy as many as 475 of the jets and 120 simulators. The service expects the first jets to be delivered in 2023 with the program to reach full operation in 2034.

The U.S. Air Force also awarded Boeing a $376 million contract to build four helicopters in the first leg of a $2.38 billion deal to replace the fleet of 46-year-old UH-1N Huey helicopters.

The Air Force said it will eventually order 84 helicopters to be delivered from 2020 through 2032.

The Air Force will use the helicopters to protect the U.S. nuclear arsenal, with aircraft based in Wyoming, Montana and North Dakota, among other locations around the world.

Boeing said its MH-139 helicopter is based on Italian aircraft maker Leonardo SpA’s (LDOF.MI) AW139, which is used by more than 270 governments, militaries and companies around the world.

The helicopters will be built at two facilities outside of Philadelphia.

“Strong competition drove down costs for the program, resulting in $1.7 billion in savings to the taxpayer,” Secretary of the Air Force Heather Wilson said.

Material from Reuters has been used in this report.

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StreetTalk
Chart Watcher: Boeing ‘Standout Defense Stock of Year’ Can Surge Another 20 Percent
boeing, defense, stock, 20 percent, surge, year
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2018-37-28
Friday, 28 September 2018 01:37 PM
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