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Boeing shares tumbled 3.4% to close at $85.60 yesterday, their biggest drop in six months, on news that Wachovia has downgraded the company from outperform to market perform. The analyst, Joe San Pietro, maintained his price range and EPS estimates but changed his rating on concerns over a peaking of Boeing's order cycle and delays in its 787 program. Boeing says it expects to meet its May 2008 first delivery date for the 787 Dreamliner, but San Pietro claims some Asia Pacific airlines have already been notified their orders will be delayed. A record 70% of the plane's parts come from outside suppliers, and two of those suppliers are running late. Boeing is providing extra funding and teams of engineers to assist them. Last year, Boeing had a company record of 1,044 orders, just behind rival Airbus -- an order level San Pietro believes is a peak. In related news, GE Commercial Aviation Services has ordered 39 Boeing jets for a total cost of approximately $5.34 billion. Deliveries will run from 2008 through 2010. Boeing will announce earnings on January 31.

• Sources: Bloomberg, MarketWatch, Business Week, MoneyCentral
• Related commentary: Boeing Sets New Order Records in '06, Defense Stocks Should Continue to Outperform in 2007 -- NY Times, Boeing Is Flying High
• Potentially impacted stocks and ETFs: The Boeing Company (NYSE:BA). Competitors: Lockheed Martin Corp. (NYSE:LMT), Northrop Grumman Corp. (NYSE:NOC). ETFs: DIAMONDS Trust, Series 1 (NYSEARCA:DIA), iShares Dow Jones US Aerospace & Defense (NYSEARCA:ITA), Vanguard Industrials ETF (NYSEARCA:VIS), Industrial Select Sector SPDR (NYSEARCA:XLI)

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Source: Boeing Shares Fall on Wachovia Downgrade