Boeing Tightens Grip as DJIA’s Best Performer in 2017

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Boeing Co. (NYSE: BA) stock rose more than $4 to close Friday essentially up nearly 2% week over week. The stock’s year-to-date share price gain reached 54.4%, solidifying Boeing’s hold as the best performing stock among the 30 stocks in the Dow Jones Industrial Average index.

All but nine Dow stocks have posted year-to-date gains with the best — other than Boeing — being Apple Inc. (NASDAQ: AAPL), up 41.6%; Visa Inc. (NYSE: V), up 33.2%; McDonald’s Corp. (NYSE: MCD), up 31.3%; and Caterpillar Inc. (NYSE: CAT) up 27.5%. Last week’s moves fell in a range of up about 0.7% for McDonald’s to up 1.5% for Apple.

The catalyst for Boeing’s upward move was the announcement of a $324 million U.S. Air Force contract to provide spare parts for the F/A-18 Hornet for the next five years with an additional five-year option.

Not a big deal as Boeing deals go, but it continues a string of wins for the company’s defense and space business that the week before won a contract worth $349 million related to replacing the U.S. Minuteman III intercontinental ballistic missile (ICBM) system.

But there might be some kinks in Boeing’s outlook. On Friday, Air Force Secretary Heather Wilson warned that the new training jet, dubbed the T-X, faces a threat to its pilot training system unless Congress and the president agree on a new defense budget. Unless a new budget is authorized, Defense Department spending will be subject to a continuing resolution (CR) that forbids spending on new programs.

The T-X contract for 350 new training jets, for which Boeing has teamed with Saab to compete against a team led by Lockheed Martin and a third team led by Italy-based Leonardo, would be included in a CR but the training systems for pilots would not. At a time when the Air Force is competing fiercely with commercial airlines for pilots, reductions to training budgets are likely only to send more pilots into the welcoming arms of the airlines.

Boeing stock closed at $240.33 on Friday, up about 0.9% for the day, in a 52-week range of $126.31 to $246.49. The 12-month consensus price target is $252.20, and the highest target is set at $302.00.