Boeing (BA) Offering Possible 11.11% Return Over the Next 10 Calendar Days

Boeing's most recent trend suggests a bearish bias. One trading opportunity on Boeing is a Bear Call Spread using a strike $135.00 short call and a strike $140.00 long call offers a potential 11.11% return on risk over the next 10 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $135.00 by expiration. The full premium credit of $0.50 would be kept by the premium seller. The risk of $4.50 would be incurred if the stock rose above the $140.00 long call strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Boeing is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Boeing is bullish.

The RSI indicator is at 42.55 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

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LATEST NEWS for Boeing

Buffett Dumps Airlines and His Aerospace Pain Will Only Worsen
Sun, 03 May 2020 22:58:46 +0000
(Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. dumped its stakes in the four largest U.S. airlines but the billionaire investor remains deeply exposed to the collapse in air travel.Berkshire still owns all of Precision Castparts Corp., a supplier of aerospace parts that’s bracing for lean times as Boeing Co. and Airbus SE cut jetliner production. Berkshire bought Precision Castparts in 2016 in a transaction valued at $37.2 billion, making it one of Buffett’s biggest deals.Now the maker of jet-engine blades and aircraft structural components is facing a double whammy as the coronavirus pandemic all but erases demand for flights, prompting airlines to park jets and slash schedules. That means less need for replacement parts and a big drop in aircraft purchasing. With carriers predicting that flying won’t return to 2019 levels for as long as three years, aerospace suppliers are hunkering down for a protracted slump.“The current downturn is quite different from regular economic cycles,” said Nick Cunningham, an analyst at Agency Partners in London. “Normally, there’s an exaggerated short-term impact with a fairly quick return. This time around, the impact seems to be significant as you’re looking at a collapse in air travel around the world.”Airline ExitIn the U.S. alone, passenger totals are down about 95% from a year ago. An index of major U.S. carriers has lost more than half its value this year, paced by a 70% drop for United Airlines Holdings Inc. Buffett said he lost money on his investments in the industry, which also included stakes in American Airlines Group Inc., Delta Air Lines Inc. and Southwest Airlines Co.“The airline business — and I may be wrong and I hope I’m wrong — but I think it’s changed in a very major way,” Buffett said. “The future is much less clear to me.”Greg Abel, Berkshire’s vice chairman for non-insurance operations, acknowledged at Berkshire’s annual meeting Saturday that Precision Castparts was getting hit, although its defense business remained strong. The parts maker is working to adjust the business to meet current demand, he said, and Buffett pointed out that the pain is rippling throughout the supply chain.“We’re going to have aircraft in this country, we’re going to be flying. But the real question is whether you need a lot of new planes or not and when you’re likely to need them and it affects a lot of people,” Buffett said. “And it certainly affects Precision Castparts, it affects General Electric. It obviously affects Boeing.”Aerospace WeaknessBoeing and Airbus have also tumbled by more than half, with steeper declines at suppliers such as Spirit AeroSystems Holdings Inc. and Triumph Group Inc.“It’s good for Precision Castparts that they’re not a standalone public company right now, because if they were, they’d certainly have a very low stock price,” said James Armstrong, who oversees investments including Berkshire shares as president of Henry H. Armstrong Associates. “It’s not great news for them, but I don’t think that business goes away. I think it slows down.”Precision Castparts has been hit by two massive and unpredictable blows that weren’t in any way its fault.Even before the Covid-19 outbreak pushed airlines into the worst crisis in industry history, Boeing’s 737 Max was grounded in March 2019 after two deadly crashes. The Chicago-based planemaker halted production of the Max, its best-selling jet, earlier this year as the flying ban dragged on.Boeing DragThe fortunes of Precision Castparts are largely tied to those of Boeing, said Scott Hamilton, a consultant at Leeham Co. who publishes a popular aviation news website. As goes the aerospace giant, so goes its suppliers, he said.“Nobody could have foreseen the airline industry collapse in which 95% of the traffic evaporated virtually overnight,” Hamilton said. “Nobody could foresee the grounding of the Max lasting what may be 18 months. And just as Precision is tied to Boeing, Boeing is tied to the airlines.”Precision Castparts watched its sales slip in the first quarter across all of its major markets, Berkshire said Saturday in its earnings report. That was partly due to the effects of Boeing’s Max problems as well as reduced shipments to customers hurt by the pandemic. That contributed to a 7.3% decline in pretax earnings in the period.The parts maker ended up temporarily halting work at a plant in Portland, Oregon, and later said it would “significantly” cut its workforce, according to a report in The Oregonian. Berkshire said that the business faced higher production costs because of “manufacturing inefficiencies primarily attributable to Covid-19.”‘Big-Time Dud’Boeing also briefly paused production of multiple aircraft programs. The company has said it will reduce employment by 10%, or about 16,000 jobs, and lower production of jetliners including the 787 Dreamliner.Precision Castparts, with its advanced technologies for casting and forging metals, will remain a key cog in the aerospace supply chain. In addition to the robust defense business in aircraft parts, the company serves customers in the power and energy industries.But with commercial air travel facing a long and uncertain recovery, Buffett’s bet on Precision Castparts will remain a drag on Berkshire for the foreseeable future.“That’s a big-time dud,” said Bill Smead, chief investment officer of Smead Capital Management, which owns Berkshire shares. “He obviously in retrospect made a real bad whole-company purchase.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

With Buffett Bailing, It Could Be A Black Monday For Airline ETF
Sun, 03 May 2020 20:17:35 +0000
The headline-grabbing takeaway from Berkshire Hathaway's (NYSE: BRK-A) shareholder meeting and first-quarter earnings report over the weekend is that Warren Buffett's conglomerate ditched its equity investments in the four major U.S. airlines.After eschewing airlines for decades, Berkshire began amassing stakes in American Airlines (NASDAQ: AAL), Delta Airlines (NYSE: DAL), Southwest Airlines (NYSE: LUV) and United Airlines Holdings (NASDAQ: UAL) in 2016, eventually becoming one of the largest investors in each of the four largest domestic carriers.While noting the U.S. has faced worse situations than the coronavirus crisis and that world's largest economy has a history of rebounding from dark times, Buffett said "the world has changed" for the airline business.See Also: 'I Was Wrong': Warren Buffett's Berkshire Hathaway Sold B Of Airline Stock In AprilWhy It's Important Although Buffett said Berkshire departed the airlines in April, confirmation that one of history's most highly regarded and widely followed investors is ditching an industry is unlikely to bring good near-term news for the lone exchange traded fund dedicated to the group: the U.S. Global Jets ETF (NYSE: JETS).Down 55.27% year-to-date, JETS follows the U.S. Global Jets Index (JETSX). Explaining why the ETF could be vulnerable on the back of Berkshire Hathaway's departure from airline equities is easy: in order, Southwest, American, Delta and United combine for over 42% of the fund's weight, according to issuer data.Put simply, yes, those stocks have already been punished this year and yes, Berkshire dropped those names in April, but it's unlikely that many investors are going to buck Buffett here and swim against this tide.How that plays out at the individual stock level remains to be seen, but it's worth noting JETS has been popular with investors this year, hauling in more than $592 million in new assets.What's NextJETS won't be alone when it comes to potential Monday vulnerabilities related to the Berkshire meeting. Buffett has a long history of favoring easy-to-understand investments. Apparently, Boeing (NYSE: BA) doesn't fit that bill because the Oracle of Omaha called the aerospace giant "hard to evaluate."That likely dashes hopes that Berkshire would come to Boeing's aide at some point, potentially using some of its massive cash position to assist the downtrodden Dow component.Buffett's Boeing comments could pressure an array of ETFs where the stock commands heavy weights, including the iShares U.S. Aerospace & Defense ETF (CBOE: ITA). Boeing is the third-largest holding in that ETF at a weight of 11.37%.See more from Benzinga * 3 Sector ETFs For This Week's Earnings Parade * With Some Help From Boeing, This Geared ETF Can Get It Together * 3 ETFs To Play For This Week's Earnings Onslaught(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

COVID-19 Could Accelerate The Arrival Of Peak Oil Demand
Sun, 03 May 2020 17:00:00 +0000
he COVID-19 pandemic has had a disastrous impact on the fuel industry, and some analysts are predicting that it could even accelerate the arrival of peak oil demand

Boeing Is Just Too Hard to Predict for Warren Buffett. What That Means for Aerospace Stocks.
Sun, 03 May 2020 15:51:00 +0000
Boeing is “hard to evaluate,” Berkshire Hathaway’s Warren Buffett said at Saturday’s virtual meeting. Another Berkshire executive offered a more optimistic look at the aerospace business.

Boeing Raises $25 Billion in Bond Sale, No Longer Needs Government Aid; Shares Slip
Sun, 03 May 2020 07:15:11 +0000
Shares in Boeing Co (BA) fell after the ailing planemaker said it raised $25 billion in debt financing and told investors that as a result it would not need to tap capital markets or the U.S. government for additional funding for now.The planemaker’s stock dropped 5.4% to $133.37 in U.S. trading on Friday, taking its year-to-date plunge to 60%. The bond offering included debt instruments with an aggregate principal amount of $25 billion across seven tranches with maturities ranging from three to 40 years.“The robust demand for the offering reflects strong support for the long-term strength of Boeing and the aviation industry,” Boeing said in a statement. “As a result of the response, and pending the closure of this transaction expected May 4, we do not plan to seek additional funding through the capital markets or the U.S. government options at this time.”The Chicago-based company said it will use net sale proceeds for general corporate purposes.The coronavirus pandemic-related travel restrictions and stay-at-home orders have brought the airline industry to an almost complete halt and caused production disruptions, which in turn have put pressure on Boeing’s cash flow. “We expect negative operating cash flows in future quarters until deliveries resume and ramp up, and we will need to obtain additional financing in order to fund our operations and obligations,” Boeing said in a regulatory filing. The aerospace company said last week that it plans to cut 10% of its workforce and announced reductions in its plane production rates as it braces for years-long industry recovery from the aviation industry crisis.TipRanks data shows that overall Wall Street analysts have a Moderate Buy consensus rating on Boeing’s stock based on 13 Holds and 6 Buys. The $183.11 average price target foresees 37% upside potential in the shares in the next 12 months. (See Boeing’s stock analysis on TipRanks).As of the end of March, Boeing had $15.5 billion in cash and marketable securities after burning through $4.7 billion in the quarter, mainly reflecting the impact of the 737 MAX grounding and COVID-19. Related News: Boeing to Axe 16,000 Jobs as Coronavirus Throttles New Plane Demand Amazon Dips 8% on $4 Billion Virus Costs Amid Prospect For 2Q Loss Apple Exceeds Expectations With FQ2 Earnings Beat

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