There are stocks that have bounced back from their day-after Christmas lows, and then there’s Boeing.
Shares of the aviation giant have soared 40 percent since its Dec. 26 low and 27 percent this year as of Tuesday’s close, when the stock broke above $400 for the first time ever to a record high. It was up nearly 1 percent in Wednesday’s premarket, at $413.66.
The surge may have some investors fearing they missed out on the rally. But one trader says there’s still plenty of runway ahead.
“Any way you slice it here … we do like Boeing,” Susquehanna’s Stacey Gilbert said Tuesday on CNBC’s “Trading Nation.”
She cites three key reasons for why she’s bullish on the stock: momentum and demand for the 737 aircraft, strength in the services sector, and a diversification in the business model thanks to a push into the defense sector.
Boeing slid more than 13 percent in the last quarter amid fears over a trade war. But Gilbert says she likes the stock despite the uncertainty over when, or even if, a trade truce with China will take place.
“This was basically your poster child for the China trade tensions. Whenever there was a negative headline, … Boeing stock always declined. This is a name that we do like even with those tensions. If tensions cause a pullback we would certainly look to add to positions here,” she said. She also noted that based on the bets options traders are making, the overall market sentiment “continues to be bullish.”
Susquehanna analyst Charles Minervino initiated coverage on Boeing with a positive rating last month. His $453 price target implies a 10 percent jump from Tuesday’s close.
Boeing has surged more than 12 percent over the last week following a blowout fourth-quarter earnings report.
The company reported results that handily topped analyst expectations, helped by a record 806 aircraft delivered. It also posted a record $101 billion in annual revenue, breaking the $100 billion mark for the first time.
Like Gilbert, Miller Tabak’s Matt Maley believes the company’s fundamentals remain strong. However, given the stock’s record and recent run, he wouldn’t chase it at current levels.
“Great move, all-time high. That’s the kind of breakout you want to see. But on a very short-term basis nothing moves in a straight line. We would like to see, it would actually be healthy, if the stock [were] to pull back here and then take another shot at trying to break out of the top end of that pattern,” he said.
He’s referring to a “megaphone pattern,” formed when a stock swings in both directions and when each swing is larger than the last. It can portend a period of increased volatility for a stock. In addition to Boeing testing the high-end of its megaphone pattern, Maley also said the stock looks overbought on a relative strength basis.
But in the longer view, he notes that the stock’s recovery has outpaced the broader market’s recovery, suggesting positive momentum from a technical standpoint.
“I wouldn’t necessarily chase up here over the near term. It’s one that should be bought on weakness. But on a long-term basis the stock looks great on the charts.”
Also Tuesday, Bernstein analyst Douglas Harned raised his target on Boeing to $459, a 12 percent upside from current levels.
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