We recently published a list of Jim Cramer Thinks These 10 Stocks Deserve Your Attention. In this article, we are going to take a look at where The Boeing Company (NYSE:BA) stands against other stocks that Jim Cramer thinks deserve attention.
In a recent episode of Mad Money, Jim Cramer advised investors to hold off on selling stocks, anticipating a rebound once the market’s downturn ended. This strategy proved effective as the average investor saw gains, with the Dow rising by 484 points or 1.16%, and the NASDAQ also climbing by 1.16%. This performance suggests that selling during Friday’s decline was not the best move.
“Last week, I advised you to hold off on selling everything and just wait, as I believed that once the pain ended, we would see a rebound. The average investor saw gains, with the Dow up 484 points, or 1.16%, and the NASDAQ also climbing 1.16%. While it might not be a full recovery, it shows that selling into Friday’s downturn wasn’t the best strategy.”
The previous week was challenging for economically sensitive stocks and tech stocks, despite the August employment report showing modest growth and a downward revision for July. The recent report seemed favorable for those hoping for Federal Reserve rate cuts, as it presented a balanced scenario of neither too strong nor too weak. Nonetheless, Wall Street reacted negatively, with investors moving away from cyclical stocks in favor of recession-proof sectors like consumer goods and pharmaceuticals. Industrials and semiconductors were particularly affected.
Jim Cramer observed that on Monday, recession-proof stocks such as pharmaceuticals, drug wholesalers, and medical devices continued to perform strongly. However, this trend is concerning as these stocks have surged significantly and might be due for a correction.
“Recession-proof stocks like pharmaceuticals, drug wholesalers, and medical devices continued to perform well, which is dangerous as these stocks have seen parabolic gains and could be due for a correction.”
According to Cramer, historically, when the Federal Reserve is about to cut rates, it’s a signal to shift investment strategies. With the Fed moving towards easing and a rate cut expected next week, Cramer suggests it’s time to reconsider holding recession-proof stocks. Instead, investors should look at more cyclical companies that could benefit from economic stimulation. While investing in cyclical stocks during a downturn can be challenging, anticipating a positive impact from the Fed’s rate cuts could make these stocks attractive.
“Historically, when the Fed is about to start cutting rates, we know that it’s time to shift focus. With the Fed leaning towards easing and an expected rate cut next week, it’s time to consider moving away from recession-proof stocks and investing in more cyclical companies. While it’s challenging to buy cyclical stocks during a slowdown, anticipating that the Fed will boost the economy can make them strong investment opportunities. It’s important to maintain diversification but be ready to adjust as needed.”
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A Boeing 737 aircrafts parked in an airport terminal with passengers awaiting to board.
The Boeing Company (NYSE:BA)
Number of Hedge Fund Investors: 42
Jim Cramer pointed out that The Boeing Company (NYSE:BA)’s stock climbed after the company reached a tentative labor agreement with a union representing about 33,000 workers. Cramer emphasized the significance of this deal, which analysts at JPMorgan said “seems like a good outcome,” as it helps The Boeing Company (NYSE:BA) avoid a potentially costly strike. Cramer views this development as a positive step for The Boeing Company (NYSE:BA), reducing uncertainty and stabilizing operations, which could have otherwise been impacted by labor disruptions.
“Boeing shares rose after the plane maker and a union representing around 33,000 of its workers reached a tentative labor agreement. The deal “seems like a good outcome” to help avoid a costly strike, JPMorgan analysts said.”
A positive outlook for The Boeing Company (NYSE:BA) is supported by its improving performance in 2024, following earlier supply chain disruptions and reduced expectations. As production of the 737 MAX and 787 aircraft increases, The Boeing Company (NYSE:BA)’s financial performance is expected to stabilize and improve significantly. Analysts at RBC Capital Markets have upgraded The Boeing Company (NYSE:BA) to “Outperform,” raising their price target from $200 to $275 due to strong demand in the commercial aerospace sector and higher delivery rates for the 737 in 2024.
The Boeing Company (NYSE:BA)’s free cash flow is projected to grow, with the 737 MAX expected to generate $2.8 billion and the 787 $1.7 billion by 2025, indicating a stronger financial position. Although there are some uncertainties around the 777X program, The Boeing Company (NYSE:BA) has reported steady revenue growth in its Global Services segment and secured major contracts with Hainan Airlines and Ryanair. Despite ongoing challenges, The Boeing Company (NYSE:BA)’s long-term outlook is increasingly positive, presenting a compelling investment opportunity.
Overall, BA ranks 9th on our list of Jim Cramer Thinks These 10 Stocks Deserve Your Attention. While we acknowledge the potential of BA, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
