Boeing (NYSE: BA) stock price soared sharply in the last five days amid reports that European Union Aviation Safety Agency will permit the company to resume flying grounded 737 MAX in November.
The upside momentum is also supported by the U.S. National Transportation Safety Board endorsement that 737 MAX is safe to fly.
Moreover, the Federal Aviation Administration head Steve Dickson has provided upbeat reports about the 737 MAX after he tested the plane last week. Steve Dickson has used the plane for more than 90 minutes to check the safety and other features.
“I like what I saw on the flight,” Dickson said. “We are not to the point yet where we have completed the process,” he added.
The market analysts also look optimistic over the 737 Max return. For instance, Alembic Global has upgraded the Boeing stock price target to Overweight from Neutral. The firm has provided a price target of $184 due to reports that European regulators will allow 737 Max to fly grounded planes.
Boeing stock price jumped more than 7.5% in the past five days, accelerating gains to 80% from March lows. Boeing stock price traded below $100 level in March this year. Its shares are still down almost by half in the past twelve months.
Boeing has reported massive losses in the second quarter of this year. The orders for commercial planes have been declining at a sharp pace due to the historical slump in the passenger airline industry.
Its revenue from the commercial airplanes segment plunged 78% from the past year period while global services revenue dropped 23% year over year. On the positive side, its defense segment stood taller in front of market uncertainty.
“The diversity of our balanced portfolio and our government services, defense, and space programs provide some critical stability for us in the near-term as we take tough but necessary steps to adapt for new market realities,” Calhoun said.