Boeing Stock Hits Turbulence on China Tariff War

The Boeing Company is the largest airline manufacturer and defense contractor and was the best performer in the Dow Jones Industrial Average in 2017. Boeing remains a leader of 2018, but the stock has hit turbulence since setting its all-time intraday high of $371.60 on Feb. 28. Shares of Boeing have hit a period of high volatility as the stock losses altitude on the possibility that the company will be hurt by the tariff battle between the U.S. and China.

Most on Wall Street say to “buy the dip” on Boeing, as its strong position in commercial aerospace limits the downside risk. I say there are too many uncertainties about how Boeing shares will be affected by the trade war and how the company will handle the Tax Cut and Jobs Act. These factors will likely appear in the form of cautious guidance when Boeing reports earnings on April 26. (See also: Can Boeing Fall Further on China Trade Threats?)

When Boeing reported its fourth quarter earnings on Jan. 31, the company handily beat analysts’ estimates, and the stock traded as high as $361.45 on Feb. 1. This was short lived, as the shares tumbled to as low as $317.39 on Feb. 5. Once the market turned higher, Boeing took off and set its 2018 all-time intraday high of $371.60 on Feb. 28. Boeing shares closed Thursday, April 5, at $336.40, up 14.1% year to date but 9.5% below the Feb. 28 high. After Thursday’s close, President Trump announce that he was raising tariffs on China by another $100 billion. This had the stock trading as low as $325, which puts Boeing stock in correction territory.


Boeing has a market-neutral P/E ratio of 24.32 and a so-so dividend yield of 2.09%. …read more

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Category: BA

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