Boeing (NYSE:BA) Shares Down 1.6% - Here's Why

Key Points

• Boeing shares fell 1.6% as investors reacted to fading expectations for a new major China order and ongoing concerns about production bottlenecks, particularly in the 737 program.
• Commercial demand remains strong, with Turkish Airlines ordering up to 150 737 MAX jets and Biman Bangladesh Airlines ordering additional 787 and 737 MAX aircraft. Alaska Air also expects 737 MAX 10 certification by the end of September, potentially expanding Boeing’s delivery opportunities.
• Analysts maintain a generally positive outlook, with a “Moderate Buy” consensus and an average price target of $270.95, but Boeing still faces execution challenges, including negative earnings, high leverage and the need to convert its backlog into stable deliveries and cash flow.

The Boeing Company (NYSE:BA - Get Free Report) fell 1.6% during trading on Thursday. The stock traded as low as $194.40 and last traded at $196.7170. Approximately 9,537,810 shares traded hands during mid-day trading, an increase of 43% from the average daily volume of 6,673,486 shares. The stock had previously closed at $199.93.

Key Headlines Impacting Boeing

Here are the key news stories impacting Boeing this week:

• Positive Sentiment: Major commercial orders strengthen Boeing’s backlog. Turkish Airlines finalized an order for up to 150 737 MAX aircraft, including 100 firm 737-8 jets and options for 50 more. Biman Bangladesh Airlines also ordered 11 additional 787 Dreamliner and 737 MAX jets. The deals reinforce strong underlying demand for Boeing aircraft. Boeing and Turkish Airlines Finalize Order
• Positive Sentiment: Potential 737 MAX 10 certification is nearing. Alaska Air expects the MAX 10 to receive certification by the end of September and plans to take its first aircraft next spring. Certification would expand Boeing’s delivery opportunities, although timing and execution remain important risks. Alaska Air Expects 737 MAX 10 Certification
• Positive Sentiment: Automation and aftermarket initiatives could support margins. Boeing is pressing suppliers to adopt more automated production methods as output rises, while its 737 MAX landing-gear exchange program has completed its first American Airlines exchange. These efforts could improve manufacturing efficiency and expand recurring services revenue. Boeing Pushes Suppliers Toward Automation
• Neutral Sentiment: Labor uncertainty has eased, but costs may rise. Boeing’s engineers’ union recommended approval of the latest contract, reducing the immediate risk of a strike that could disrupt 777X testing. However, higher wages could add to near-term costs.
• Negative Sentiment: China-order expectations have deteriorated. Reports indicate the Trump-Xi summit is unlikely to produce a new major Chinese Boeing order. Investors had viewed such an announcement as an important near-term catalyst, so the disappointment is weighing on sentiment. Hope Fading for New Boeing China Deal
• Negative Sentiment: Production and financial execution remain the larger concern. Boeing’s 737 output of 47 aircraft per month is reportedly not yet stable because of wing-shop bottlenecks. Investors remain focused on whether the company can convert its sizable backlog into deliveries, cash flow and improved profitability.

Wall Street Analysts Forecast Growth

Several research firms recently commented on BA. JPMorgan Chase & Co. upped their target price on shares of Boeing from $270.00 to $290.00 and gave the company an "overweight" rating in a research note on Wednesday, July 29th. Argus raised shares of Boeing from a "hold" rating to a "buy" rating and set a $265.00 price objective for the company in a research report on Tuesday, August 11th. Cantor Fitzgerald cut shares of Boeing to a "neutral" rating in a research note on Tuesday, August 11th. Robert W. Baird set a $300.00 target price on Boeing in a research report on Wednesday, July 29th. Finally, Barclays cut Boeing from an "equal weight" rating to an "underweight" rating in a report on Tuesday, August 11th. One research analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, six have given a Hold rating and three have given a Sell rating to the company. According to data from MarketBeat, Boeing presently has an average rating of "Moderate Buy" and an average target price of $270.95.

Boeing Stock Down 1.6%

The company has a current ratio of 1.14, a quick ratio of 0.33 and a debt-to-equity ratio of 6.77. The business's fifty day moving average price is $215.06 and its 200 day moving average price is $217.67. The company has a market capitalization of $155.48 billion, a P/E ratio of 85.16 and a beta of 1.21.

Boeing (NYSE:BA - Get Free Report) last issued its earnings results on Tuesday, July 28th. The aircraft producer reported ($0.76) EPS for the quarter, missing the consensus estimate of ($0.34) by ($0.42). Boeing had a net margin of 2.41% and a negative return on equity of 346.82%. The firm had revenue of $24.56 billion during the quarter, compared to analyst estimates of $24.26 billion. During the same quarter in the prior year, the firm posted ($1.24) EPS. The firm's revenue for the quarter was up 8.0% on a year-over-year basis. As a group, equities research analysts predict that The Boeing Company will post -0.91 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Highland Investment Advisors LLC acquired a new position in Boeing during the second quarter valued at approximately $26,000. 1 North Wealth Services LLC bought a new position in Boeing during the fourth quarter worth about $27,000. Wealth Preservation Advisors LLC grew its stake in Boeing by 66.7% in the fourth quarter. Wealth Preservation Advisors LLC now owns 125 shares of the aircraft producer's stock valued at $27,000 after acquiring an additional 50 shares during the period. Strategic Wealth Advisors LLC acquired a new position in shares of Boeing in the 2nd quarter valued at approximately $27,000. Finally, Bell Investment Advisors Inc bought a new stake in Boeing during the 2nd quarter worth approximately $29,000. 64.82% of the stock is currently owned by institutional investors and hedge funds.

Boeing Company Profile

The Boeing Company is a global aerospace company that designs, manufactures and services commercial airplanes, military aircraft, satellites, space systems and other aerospace products. Its principal business areas include commercial airplanes, defense and security, and aftermarket services that support aircraft operations throughout their life cycles.

Boeing's commercial portfolio includes the 737, 767, 777 and 787 families of jetliners, while its defense and space operations provide products and services for the U.S.

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