Boeing Investment Thesis

I believe that Boeing is going to experience a series of very fortunate events. The company has been plagued this year with the grounding of the 737 MAX and coronavirus, both of which are devastating to brand and industry respectively. I see a large turn around in value for the company in the next few months.

1. Alaska Airlines just signed a lease for thirteen 737 MAX’s, which is the first major airline to sign a contract with Boeing after the previous crashes. It is very likely to see other major airlines follow suit. Alaska airlines, is an early mover and is often a pioneer in the airline industry. Even more importantly Alaska sold 10 Airbus A320’s in exchange for the the Boeing 737 MAX’s-further showing the preference to Boeing products.
2. So long as Boeing doesn’t have any more brand issues involving safety of the new product line, an entirely new stream of revenue has opened up to the company.
3. Any positive news regarding a coronavirus vaccine transitively effects Boeing. The travel industry was clearly effected the most by the pandemic and stands the most to gain from any positive news.
4. Boeing is the only American company who is a dominant aircraft manufacturer.

I truly believe that the Boeing has an asymmetrically skewed probability of benefiting from the above events. The stock is currently $219 a share.