Boeing Q4 Earnings Outlook: Opportunities Around Recent Highs and Lows
Boeing Q4 Earnings Outlook: Opportunities Around Recent Highs and Lows
The aerospace company could soar after rallying since November
- Boeing will report fourth-quarter earnings on Tuesday, Jan. 28.
- Fourth-quarter deliveries fell from a year ago, prompting a short-term dip in the stock ahead of earnings.
- The company is trading within recent swing highs and lows, offering potential options plays for traders to express bullish or bearish views.
Boeing (BA) has had its share of trouble over the last few years, including quality control issues and several accidents that involved its airliners.
Those factors helped the stock lost nearly half of its value from December 2023 to November 2024. It has recovered somewhat but remains well below its recent highs.
Prices have managed to stage a rally since November, however, rising about 30% over the last several months after hitting the lowest level traded since October 2022.
For January, Boeing is up about 0.6%, compared to the S&P 500’s 3.3% gain over the same period. This likely reflects a softer outlook for the stock among speculators.
Will Boeing’s earnings help sustain the recent rally?
Boeing is set to release quarterly fiscal results on Tuesday, Jan. 28, before the market open.
The earnings follow an update on fourth-quarter deliveries, which was released on Jan. 14. The update prompted a two-day sell-off in the stock, although it quickly recovered.
Commercial deliveries totaled 57 airplanes in the reporting period, which was down from 157 a year ago. The dip was primarily because of a drop in 737 deliveries that totaled just 36, compared with 110 a year ago. Its defense segment also saw a dip in deliveries, dropping from 54 a year ago to 36 in the fourth quarter.
According to TradingView, analysts, expect fourth quarter earnings per share (EPS) to come in at - 1.80. That would compare to -$0.47 a year ago. Revenue is expected to cross the wires at $16.56 billion, representing a drop from $22.02 billion last year.
Boeing has missed EPS expectations in two of the last four earnings reports, but it has only missed revenue one time over the last four quarters. That said, if that trend holds, we can expect Boeing may miss expectations. This could potentially cause a negative reaction in the stock price after earnings.
When looking at price targets among analysts, the picture is on the bearish side. Among 25 analysts, the one-year price target for Boeing stands at an average of 187.84, TradingView said. That target is just 5.5% above the current stock price. Still, it’s important to realize that if Boeing does beat expectations, it could lead to upgraded price targets.
Trading Boeing earnings
Boeing stock is trading about 2.5% below its recent multi-month swing high of 182.57 from December 2024. That level could represent some technical resistance if prices move higher.
Alternatively, the January swing low of 164.62 may help to support prices if there is a move to the downside. For traders who expect a bullish reaction, selling a put spread with the short option near the recent swing low could offer a strategic play to get long while taking advantage of a post-earnings volatility drop.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
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