Boeing (BA), Dollar Tree (DLTR) stocks jump on PBL deal, share buyback

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Boeing (BA), Dollar Tree (DLTR) stocks jump on PBL deal, share buyback

 Boeing (BA), Dollar Tree (DLTR) stocks jump on PBL deal, share buyback
Image source: SFIO CRACHO,Shutterstock

Highlights

  • The US Defense Department has extended the Boeing Company’s (NYSE: BA) PBL contract. The contract is valued at approximately US$23.8 billion. 
  • Boeing has been providing PBL support to the C-17 fleet since 1998. 
  • Dollar Tree Inc. (NASDAQ: DLTR) board has increased its share repurchase authorization to US$2.5 billion from the earlier US$1.45 billion approved on March 2, 2021. 

The Boeing Company (NYSE: BA) stock was up over 3%, and Dollar Tree Inc. (NASDAQ: DLTR) stock jumped 16% on Wednesday after the former announced the extension of its defence contract and the latter revised its share buyback program upwards to US$2.5 billion.

BA stock was priced at US$226.055, and DLTR stock was trading at US$100.495 at 3:45 pm ET.

Boeing Company 

The stock jumped on Wednesday following the news of its contract extension by the US Defense Department. Under this extension, Boeing will continue to provide and perform sustainment activities for C-17 Globemaster III.

In addition, Boeing will keep providing engineering, material management, and field support to the global fleet of 275 aircraft, the company said. 

The 10-year contract is valued at around US$23.8 billion. Under the agreement, Boeing will reduce the operating cost per flight hour for the global fleet. Additionally, the performance-based logistics (PBL) agreement would reduce costs and improve the work scope. 

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Boeing has been providing PBL support to the C-17 fleet since 1998.

For the three months ended June 30, 2021, Boeing posted revenue of US$17.00 billion with an operating margin of 6.0 percent, compared to the revenue of US$11.81 billion in the corresponding quarter of 2020, with an operating margin of (25.1) percent. 

The net income was US$587 million compared to the net loss attributable to shareholders of US$(2.38) billion for the three months ended June 30, 2021. 

The company has a market cap of US$132.9 billion. The stock closed at US$225.36, with a 3.18% gain at 4:00 pm ET on Sep 29, 2021. 

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Boeing Company (NYSE: BA) and Dollar Tree Inc. (NASDAQ: DLTR): Two trending stocks on Sep 29.

Source - pixabay

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Dollar Tree Inc. 

The stock closed at US$100.51 with a 16.49% gain at 4:00 pm ET. On Wednesday, the company announced to increase its share repurchase authorization to US$2.5 billion. On March 2, 2021, the board of directors had authorized the share repurchase of US$1.45 billion. 

In fiscal 2021, the company has repurchased US$950 million shares and plans to utilize its free cash flow to improve its capital allocation. 

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Dollar tree operates stores in the US and Canada. It had 15,865 stores as of July 31, 2021, in 48 states and five Canadian provinces. 

The company earned revenue of US$6.34 billion for the quarter ended July 31, 2021, and a net income of US$282.4 million. Its revenue was US$6.28 billion, and net income was US$261.5 million for the same quarter in 2020. 

The diluted per share net income was US$1.23 for the July quarter of 2021 compared to US$1.10 per share diluted net income in the previous year’s corresponding period. 

The company has a market capitalization of US$22.6 billion. Its P/E ratio is 15.83, and its forward P/E ratio for one year is 15.60. 

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Bottomline

The NYSE composite index gave a 12.53% return YTD, and the NASDAQ composite generated a 12.60% return YTD. Likewise, the S&P 500 gave a 16.06% YTD return, indicating strong gains in the stock markets. On the other hand, Boeing gained 5.28%, while Dollar Tree fell 6.93%. DLTR’s price drop could be attributed to the covid health crisis. However, with the composites showing a positive two-digit return, markets are optimistic of sustained growth. 

Investors, however, should evaluate the companies carefully before investing in stocks.

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