'Full Access to Indonesia' Means Another Big Boeing (NYSE:BA) Buy
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President Trump once again brought a major win to Boeing's doorstep, as a recent deal set between the United States and Indonesia meant a 19% tariff rate for Indonesia, a 0% tariff rate on American goods going into the country, and a deal for 50 new jets for Boeing.
The details were kept somewhat quiet, but President Trump noted that 'many' of the Boeing planes purchased would be 777s. Given that the 777X is not yet certified, Indonesia must be prepared to wait a while to get their hands on these. Beyond that, the early numbers released suggest that the $18 billion trade surplus Indonesia has with the United States would be effectively gone as a result.
But How Many 787s Can They Make?
While Indonesia is waiting on its 777s, Boeing is considering production rates on its 787 lineup. And Boeing has very ambitious plans to produce the widebody jet, increasing production on them to 16 a month. This is just for one plant, as well. Specifically, the Charleston, South Carolina plant, which by itself would produce somewhere around double its previous production. The previous record production pace was 14 a month, and that rate was split between Charleston and the Everett plant in Washington state. Thus, depending on the exact rate of the split, which was unavailable, Charleston may be on track to double production outright.
This would require an upgrade, as Charleston can only handle 12 787s a month, based on an analysis from 2020. But back in December, Boeing announced plans to drop a full billion dollars on upgrades for the Charleston plant. And given that Boeing wants to hit that 16-a-month target rate by 2030, the upgrade may come just in time.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 18 Buys, two Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 24.43% rally in its share price over the past year, the average BA price target of $233.25 per share implies 1.79% upside potential.
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