BA, GD, DAL: Which Stock Can Fly Highest in 2024?
The industrial stocks mentioned below have been met with flat-to-disappointing performance over the past year. However, with a new year and a new slate, the analysts foresee the recovery gains to kick in at some point in the next 12 months. In this piece, we’ll use TipRanks’ comparison tool to have a look at two aerospace defense stocks (BA and GD) and an airline (DAL). We’ll then determine which Strong-Buy-rated aircraft-based industrial stock has the most room to fly.
Boeing (NYSE:BA)
It’s a nightmarish start to the year for shares of Boeing, which are down more than 22% year-to-date, thanks in part to the horrific news that an exit door in one of its 737 Max 9 aircraft blew off midflight, a horrifying occurrence that (thankfully) didn’t result in any fatalities or injuries.
With the company, once again, the target of safety concerns, things could go from bad to worse as investors finally get fed up with the firm’s track record of safety shortcomings. With plenty of negativity and unanswered questions for 2024, I remain neutral on the stock, even as Wall Street stays bullish.
Indeed, things could have been a heck of a lot worse following the latest exit door blow-off. Following the incident, expect the FAA to put Boeing aircraft (especially the 737 Max 9) under a magnifying glass. Until there are even more significant and more windswept changes to management, I’m not sure the stock will be able to ascend back to the highs it started the year at.
With every big down day, the price targets of analysts have that much more upside. But as to whether Boeing can clean up its act for good remains the billion-dollar question. Personally, I’m not so convinced.
In any case, investors should brace themselves for turbulence as analysts factor in the latest bad news from Boeing into their models. Some downgrades may be ahead, and this could impact the stock’s current “Strong Buy” standing. My guess is that analysts won’t have to change their theses by all too much. Further, the stock is 20% cheaper than just over two weeks ago.
Matthew Akers of Wells Fargo (NYSE:WFC) recently downgraded BA stock from Buy to Hold. However, his $225.00 price target still entails a 10.8% upside from current levels.
What is the Price Target of BA Stock?
Boeing stock is a Strong Buy, according to analysts, with 18 Buys and five Holds assigned in the past three months. The average BA stock price target of $269.26 implies 32.6% upside potential.
General Dynamics (NYSE:GD)
General Dynamics stock has been underwhelming over the past year, rising just 8% over the timespan. The defense company’s subsidiaries have been winning over some impressive contracts of late, with the latest one worth $170.8 million coming from none other than the U.S. Air Force.
Should geopolitical tensions continue to mount, it’s hard not to look at shares of GD as a great way to defend one’s portfolio from the turmoil. As one of the most intriguing (and reliable) firms in the defense scene, I have to stay bullish going into 2024 as the stock looks to pick up traction and make a run for new highs again.
At 16.8 times forward price-to-earnings (P/E), shares of GD stand out as a relative bargain in the industry. Shares look a heck of a lot cheaper than the aerospace & defense industry average of 21.6 times forward P/E. Given that General Dynamics is a well-diversified defense play (it has air, land, and sea covered), I view the discount to industry averages as a tad unwarranted. Indeed, Wall Street recommendations seem to suggest that GD stock is perhaps undervalued, with promising upside in the new year.
With its Aerospace, Combat Systems, and Marine Systems businesses (covering air, land, and sea, respectively), GD stock truly is a great one-stop-shop for value hunters seeking an all-around defensive play.
What is the Price Target of GD Stock?
General Dynamics stock is a Strong Buy, according to analysts, with 12 Buys and one Hold assigned in the past three months. The average GD stock price target of $289.36 implies 15.76% upside potential.
Delta Air Lines (NYSE:DAL)
Finally, we have an airline that’s been experiencing massive turbulence since the dark days of 2020, when the pandemic sent shares nosediving into the abyss. Over the past two years, DAL stock has fallen by over 5%, making the turbulent play a rough and unrewarding ride for long-term shareholders.
Looking ahead, Wall Street thinks the airline play may finally have what it takes to lift off the tarmac, perhaps offering a somewhat smoother ride for investors. After the latest pullback, I think Delta (and its peers) represents a great value opportunity. As such, I’m staying bullish on the stock.
It’s been a turbulent 2024, with shares down 7.37% year-to-date. Delta recently reported applaud-worthy record revenues in its latest quarter, but the market has a mind of its own. And right now, they’re no fans of the airlines as we move further into the new year. What’s behind the ugliness of the airline stocks?
Higher oil prices are part of the reason airlines are feeling the turbulence again. Additionally, a looming recession and cautious profit guidance ($6.00-7.00 earnings per share expected for the full year) from management may be making investors a tad jittery.
Though it’s hard to catch the bottom of airline stocks, I view DAL stock as a well-managed airline that has what it takes to power higher, if not in 2024, perhaps within the next three years. Though there are headwinds ahead, we can’t ignore the fact the firm recently clocked in impressive revenue numbers. The airline has demonstrated strokes of brilliance, yet many investors won’t have it. Perhaps it’s time to take a contrarian view while shares (and expectations) have fallen off a bit.
What is the Price Target of DAL Stock?
Delta stock is a Strong Buy, according to analysts, with nine unanimous Buys assigned in the past three months. The average DAL stock price target of $53.33 implies 43.6% upside potential.
The Takeaway
The three aforementioned aircraft-related stocks have been turbulent rides of late, but Wall Street thinks they could zip higher this year. Despite their troubles, I do agree investors are way too pessimistic at this juncture, especially if that soft economic landing is in store. Of the trio, Wall Street expects the most gains from DAL stock (~43.6%) for the year ahead.
