Boeing Shares Soar 3.3% on U.S.-U.K. Trade Deal Hopes

Boeing (BA.US) shares surged on Thursday, closing at $191.70, marking a 3.3% increase. This performance significantly outpaced the broader market indices, with the S&P 500 and the Dow Jones Industrial Average both rising by approximately 0.6%. The rally in Boeing's stock price was driven by positive developments in U.S.-U.K. trade relations, which sparked bullish sentiment among investors.

According to U.S. President Trump, the U.K. is set to purchase $100 billion worth of aircraft from Boeing. While this is a positive signal, it is not the primary driver behind the day's stock price surge. Boeing currently has a backlog of $435 billion in commercial aviation orders, which, based on expected production capacity by 2025, is sufficient to keep the company busy for nearly a decade.

The true catalyst for Boeing's stock price increase is the broader signal sent by this agreement, indicating that more international trade deals may be on the horizon. As one of the largest exporters in the U.S., nearly half of Boeing's revenue in 2024 is expected to come from overseas markets. Global demand is crucial for Boeing, and trade barriers and tariffs could suppress overseas demand and cede market share to competitors like Airbus, which does not face similar trade obstacles.

Boeing's stock price has risen by 5% since the beginning of 2024 and by 23% since the U.S. presidential election on November 5, 2024. This indicates that investor confidence in the company's prospects is gradually recovering.

However, Boeing still faces numerous challenges. In addition to actively pursuing international orders, the company must address internal issues related to production quality and capacity enhancement. Boeing has not achieved full-year profitability since 2018, indicating that its recovery path will require time and sustained effort.