Boeing Co (NYSE:BA, ETR:BCO) shares moved higher on Monday following two positive developments for the airline over the weekend.
Firstly, Boeing and the IAM 751 labor union, representing workers who assemble Boeing's planes in the Seattle region, reached a tentative deal which the union’s president Jon Holden has recommended members accept.
The new deal ensures Boeing’s commercial aircraft will be built in the Puget Sounds region, if launched in the life of the contract as well as higher wager, lower employee health care costs, and additional employer-funded retirement benefits.
“While members could still vote to reject the deal and strike, we see this as reducing the risk significantly,” Bank of America analysts believe.
“We see the concession on both sides and endorsement by Holden, as a sign a strike is less likely to occur.”
Analysts see September 12th as “the next big test.”
“Given the strong member sentiment regarding the return of a pension and 40% wage increases, there is some risk the deal could be rejected,” they wrote.
“If the deal is accepted, we see this as a benefit for the industry overall and would help avoid further OEM delivery disruption.”
Additionally, over the weekend the airline’s Starliner spacecraft returned safely to Earth, landing in New Mexico.
While the ship returned without astronauts on board due to concerns about the vessel's safety, analysts welcomed the update as it brings the three-month flight test saga to a close.
“We view both ‘landings’ as meaningful positives for Beoing, sentiment around the name, and for [new CEO] Kelly Ortberg as he works to move the company forward,” the analysts wrote.
They repeated their ‘Neutral’ rating on Boeing and awarded it a $200 price target.
Shares of Boeing were up 3.5% at about $163 on Monday morning.