Boeing Workers Avert Strike Threat With New Four-Year Deal — BA Stock Jumps 3%

• SPEEA members representing about 13,000 engineers and 4,000 technical workers ratified new four-year contracts.
• Jefferies reiterated its Buy rating and $265 price target, saying the agreement removes near-term risk to 737 production and 777X certification.
• BA retail sentiment jumped to ‘extremely bullish’ from ‘bullish’ on Stocktwits, while message volume remained ‘high.’

Boeing (BA) shares rose more than 3% during regular trading on Thursday after the company’s largest white-collar union approved new four-year contracts, removing the immediate threat of a strike that could have disrupted production and certification work. The agreement covers thousands of Boeing engineers and technical workers and comes as the aircraft maker works to increase jet production and secure federal approval for the delayed 737 MAX 10 and 777X.

At the time of writing, BA stock was down 0.04% in after-hours trading.

Boeing Workers Approve Four-Year Contracts

The Society of Professional Engineering Employees in Aerospace (SPEEA), which represents about 13,000 Boeing engineers and 4,000 technical workers, said members of both its professional and technical bargaining units had ratified four-year contract offers from Boeing.

The professional unit, which includes engineers, approved its contract with 67.62% of the vote, while the technical unit backed its agreement with 53.48% support.

“We secured many victories that some thought were completely out of reach when this negotiation cycle started,” SPEEA said in a release.

Under the new contracts, workers will receive a 10% wage increase upon ratification, followed by annual raises of 4%. The agreements also provide the potential for an additional 2% performance-based increase, Reuters reported.

Strike Threat Removed

The union vote removes the immediate prospect of a work stoppage after Boeing employees had rejected the company’s initial proposal.

The existing contracts were due to expire on Oct. 6, with a strike potentially beginning as soon as Oct. 7. The new agreements allow Boeing to avoid that disruption as it works to stabilize and increase production of its fast-selling jets.

Boeing is also seeking federal approval for the 737 MAX 10 and 777X, both of which are years behind schedule.

Boeing said it was “pleased with the outcome of the vote,” according to CNBC.

Jefferies Says Production Risk Eases

Jefferies reiterated its ‘Buy’ rating and $265 price target for Boeing following the union vote. The firm added that the agreement removes near-term risk to 737 production and 777X certification.

BA Stock: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for BA jumped to ‘extremely bullish’ from ‘bullish’ over the past 24 hours, while message volume remained ‘high’ at the time of writing.

BA shares have dropped nearly 11% year-to-date.

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