Last week, American stocks saw new highs. Both the Dow Jones Industrial Average and the Standard & Poor (S&P) 500 stock index hit record highs last Monday despite political and economical instabilities (mainly concerning interest rates) in the US. How did both lists manage to do this? Boeing. The American aircraft manufacturer was listed above tech giants like Apple, Netflix, Facebook, and Alphabet (Google’s parent company) despite the fact that investors have been dashing towards stock in growing businesses of the like.

In the past 12 days, individual shares of Boeing’s stock price has risen to over USD$240, and even despite seeing a drop in the middle of that period, the overall stock has gained 50 percent this year. The next companies, Netflix and Apple, are up 37 and 34 percent respectively.

So, what is driving this massive growth? Here are the key components of Boeing’s growth this year.

Global Growth

Recently, the world has seen large global economy growth, and American stock is showing it. Earnings reflected in S&P 500 companies have been double digit figures this year for the first time in six. Boeing is no exception.

“Boeing definitely represents one of the big multinational companies that is benefiting from global economic growth,” says Michael Arone, a managing director and investment strategist for State Street Global Advisors. “We’re having a more global, synchronized recovery.”

Dennis Muilenburg, Boeing’s CEO, points out that passenger air travel has outpaced global economic growth in the last six months. He also notes that cargo was up 10% through May. He says that demand for Boeing products is “more geographically diverse and balanced across the globe.”

Cost Reduction
Managing cost is something that Boeing is proving to be very good at. Though a big part of this is establishing stronger “partnerships” with suppliers, maybe the most notable way that Boeing has been able to cut costs is to increase operations in South Carolina. Last February, Boeing workers in South Carolina rejected a union organizing effort that would have given them greater negotiating power with the aerospace giant. This means that Boeing can keep labor costs low and ask workers to do harder, more hands-on work that other employees who are unionized may not want to do.

The effects of cutting costs are most noticeable in the growth of boeing’s 787 Dreamliner aircraft. The 787’s production delays and cost overruns seem to be behind it, and the aircraft, along with the B737, is now one of Boeing’s largest moneymakers.

“[Boeing has] done a great job on costs, crunching suppliers and labor simultaneously increasing revenue,” said Richard Aboulafia, an aerospace analyst at the Teal Group. “That’s impressive.”

“At a time of sluggish growth in the economy and top-line revenue growth, [Boeing] has been very adept at managing costs and maintaining margins,” said Arone.

Boeing currently has operating profit margins of 9.6%. Though this is an all-time high for Boeing, executives want more. By 2020, Boeing wants to increase margins to 15%, which is close to a 50% increase in profit margin.

However, an investment banker identified only as Bernstein in sources thinks that, right now, Boeing can reach profit margins as high as 12.5%. Based on that assumption, Bernstein thinks that Boeing can get its stock price up to USD$274. In addition, Bernstein says that if Boeing can get its profit margin to 15%, stock prices can be as high as USD$315/share.

Low Interest
“Boeing is a huge beneficiary of low interest rates,” said Aboulafia. “Customers have every incentive to replace again planes with more fuel-efficient versions.”

Like buying a car, the purchase of a plane is usually financed, at least in part, by borrowing money, often from the manufacturer. Low interest rates in the US give carriers, especially American ones, great incentive to buy new planes. In addition at a time when worldwide gas prices are high, as Mr. Aboulafia mentions, it is often more economically viable for airlines to buy new, fuel-efficient aircraft from Boeing than it is for them to buy gas for older planes that need more fuel.

Government “Endorsement”
Despite original claims that the cost of American-made planes cost too much to produce, US President Donald Trump seems like he can’t get enough of Boeing. One month, Trump traveled to the Boeing 787 factory in South Carolina. On the trip, Trump said that he was at the plant to “celebrate jobs” that were added after an effort to create a union was blocked, as discussed above.

“God bless Boeing,” Trump said while on his trip.

Boeing is currently working on building two new aircraft to serve as Air Force one for the President, who followed through on a promise to purchase new Boeing Super Hornet fighter jets. (The federal government purchased 14 of such planes in May, valued at USD$1.1 billion.)

In April, Trump made another decision that helped Boeing to grow in promising to maintain and even revive the Export-Import Bank (EXIM). The EXIM is a US federal agency that helps companies finance projects to sell products overseas. This has helped Boeing to made deals like one it recently made with customers in Iran, who placed orders for over USD$20 million in new aircraft. (Trump’s threat to renew sanctions on Iran has had seemingly no effect on Boeing.)

The Road to Come
Boeing’s investors are hoping for a cut in corporate tax to be implemented soon. Last year, Boeing paid 23% of its revenue to the US government, which totaled about USD$1.2 billion.

Despite doubts that Boeing’s growth, or the growth of any other company, can continue at the rate it has been, stock market analysts are still optimistic that Boeing can continue to thrive. The highest current per-share target price of Boeing’s stock is currently USD$300, with other estimates suggesting that Boeing could react USD$275 or USD$280 per share.

And, to top it off, Mr. Arone says that he sees no “immediate threat” to continued growth. “None of [the warning signs] are flashing red. Not even yellow,” he said.

Boeing knows, it seems, that they have room to grow in the coming months and years. By 2025, the company wants to triple its airplane support and service sales. This means that, in eight years, Boeing plans to add an additional USD$50 billion in annual business to what it already makes.

“[The plan is to] launch a third major business unit [known as] Boeing Global Services, which would operate alongside Commercial Airplanes and Defense, Space & Security,” says Boeing. “[BGS will offer] Supply Chain, Engineering, Modifications, Maintenance, Digital Training, Analytics, Training, and Professional Services.” Boeing says that this will help airlines to reduce costs, drive efficiency, and optimize operations.