The past few years have been some of the worst in Boeing’s (BA) history. The airline manufacturer has had to deal with rising international competition, the flaws in its 737 Max jet, and then the pandemic’s collapse in global air travel.
These high-profile dangers have been well baked into shares. Now, with the 737 Max getting back into service and the pandemic ending, things are potentially looking up for the airliner.
That may be why the company has started earning analyst upgrades. In addition to the company’s commercial operations, its also has aerospace operations that have been a more consistent line of business.
Although the company isn’t again profitable, an operational turnaround could allow shares to move far higher in the months ahead. Despite being up about 68 percent in the past year, shares are still nearly one-third off of their pre-pandemic highs.
Action to take: Boeing shares have been trending higher, so it’s not a completely contrarian play at this point. As the company isn’t currently paying a dividend, the best way to play the current rally is with a call option trade rather than buying share outright.
The January $300 calls, going for about $13.50, look like a reasonable trade for the current rally continuing through the end of the year. Shares may not move far enough to go in-the-money, however, so traders should look for an end to the current uptrend to take profits.
Disclosure: The author of this article has no position in the stock mentioned here, and does not intend to trade this company after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.