Jim Cramer sees upside potential in Boeing after the stock price was hit by the 737 Max issue

CNBC’s Jim Cramer recommended buying the dip in Boeing after the stock traded lower for two consecutive sessions.

“Even with some short-term turbulence, Boeing is perfectly positioned as the grand reopening is in full swing,” the host of “Mad Money” said Monday.

Dozens of 737 Max jets, manufactured by Boeing, were temporarily grounded Friday to fix a problem with the plane’s power system. Shares of Boeing are down 2% since the announcement and closed below $ 250 a share on Monday.

However, Cramer said the circumstances don’t warrant the stock dumping as Boeing is at a turning point.

“Boeing has too much to do for its shareholders to be shocked by a bad headline,” he said. “I also consider the current decline in a number of negative sell-side inquiries into corporate governance to be a non-issue.”

Boeing’s 737 Max was returned to service late last year after being grounded worldwide in the aftermath of two fatal accidents that killed hundreds.

Demand for air travel is increasing as consumers are less concerned about contracting the corona virus. Meanwhile, airlines are ordering more planes, which can be funded at low interest rates, Cramer said. For example, Southwest Airlines announced last month that it would buy 100 copies of the smallest Max model.

“This minor issue aside, the 737 Max is really back. Look, this used to be Boeing’s most popular plane and it was recertified as the airlines got ready to place orders again in anticipation of the grand reopening,” he said.

“That’s why we own these for the charity and so far our thesis is going as expected.”

Despite the sell-off over the past four weeks, Boeing shares are up more than 16% this year. The stock is outperforming the S&P 500, which is up 10% to date.

Disclosure: Cramer’s charity owns stock of Boeing.

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