Boeing Secures $12.8 Billion in Defense Contracts, Enhancing Profitability
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 14h ago
0mins
Source: Fool
- Massive Contract Value: On December 29, Boeing secured two of the largest defense contracts worth a total of $12.8 billion, including a $4.2 billion E-4B logistics service contract and an $8.6 billion order for F-15IA aircraft, indicating strong demand in the defense sector.
- Profitability Enhancement: These four contracts account for approximately 73% of the revenue generated by Boeing's Defense, Space, and Security segment in 2024, reflecting the company's resilience despite an operating profit margin of less than 2% in a challenging market.
- Importance of Service Business: Notably, three of the contracts are for post-sale services rather than aircraft production, highlighting Boeing's competitive edge and potential for sustained revenue in the lucrative after-sales service sector.
- Positive Market Reaction: Boeing's stock rose by 3.05%, with a current market capitalization of $184 billion, demonstrating investor confidence in the company's future profitability, especially as its commercial aircraft division continues to face significant losses.
Analyst Views on BA
Wall Street analysts forecast BA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BA is 249.07 USD with a low forecast of 150.00 USD and a high forecast of 285.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
13 Buy
2 Hold
1 Sell
Strong Buy
Current: 227.380
Low
150.00
Averages
249.07
High
285.00
Current: 227.380
Low
150.00
Averages
249.07
High
285.00
About BA
The Boeing Company is an aerospace company. Its segments include Commercial Airplanes (BCA), Defense, Space & Security (BDS), and Global Services (BGS). Its BCA segment develops, produces and markets commercial jet aircraft principally for the commercial airline industry worldwide. Its family of commercial jet aircraft in production includes the 737 narrow-body model and the 767, 777 and 787 wide-body models. Its BDS segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance and mobility. Its BGS segment provides services to its commercial and defense customers worldwide. It sustains aerospace platforms and systems with a range of products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
