Boeing -2.3% following downgrade, Airbus order cancellation

Boeing (BA -2.3%) is easily the Dow's biggest decliner today following two pieces of bad news - one specific to Boeing, the other to the airline industry.

RBC downgraded BA shares to Sector Perform from Outperform, believing most of the good news already is out and reflected in the stock; Boeing "has become an execution/cash deployment vs. an upside to growth story, and this is likely to cap any multiple expansion from here," RBC writes.

Also, today's surprise cancellation of an Airbus (EADSF -2.9%) order raises questions over new aircraft demand, whether for the Airbus A350 or a more general wobble of confidence in a previously solid market that could also hit Boeing.

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Comments (11)
  • stockpicker99
    , contributor
    Comments (105) | Send Message
    I think people are short sighted. If any body performs a financial analysis of BA, the cash flow and profit margin are very respectable compare to the competition. As a matter of fact, this should be a great news for BA because the cancelled orders may come to BA. BA's defense orders are also very respectable. IMHO, this is an opportunity to buy some BA stocks.How many times have we seen the analysts are right?
    11 Jun 2014, 01:46 PM Reply Like
  • kata
    , contributor
    Comments (1535) | Send Message
    Did they cancel the orders due to lack of demand or did they just sour on the plane itself?
    11 Jun 2014, 02:52 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1825) | Send Message
    I wrote a comment here on SA a few months ago on this very question...whether these airliner backlogs are real or just wishful orders...

    11 Jun 2014, 02:16 PM Reply Like
  • healthythoughts
    , contributor
    Comments (2988) | Send Message
    The lower it goes, the bigger bargain!
    11 Jun 2014, 08:20 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3429) | Send Message
    I agree. It seems GE is a safer way to play the aerospace cycle than BA is, but I think theres more upside in BA even if GE can spinoff some of GECC
    11 Jun 2014, 02:37 PM Reply Like
  • chammond63
    , contributor
    Comments (136) | Send Message
    I couldn't aree more. GE is a much more conservative play but I think BA has way more upside potential
    11 Jun 2014, 02:57 PM Reply Like
  • User 7530821
    , contributor
    Comments (240) | Send Message
    The sell-off may very well reflect the over reaction of weak hands in the market and is an opportunity for patient investors in BA, Airbus and Rolls-Royce. (The later declined 5.48% today). The cancellation by Dubai's Emirates airline may actually have a silver lining for Airbus and Rolls-Royce. Demand remains robust and 70 airlines/engines for 2019 delivery are more valuable today than in 2007 when the planes were sold and capacity was not so constrained. Does the market really think that Airbus will now give away these planes? I would submit that Airbus should be able to resell this precious capacity at higher price/margin than they did in 2007, and worse case, pull into 2019 later deliveries as needed. Net-net, the sell-off seems a bit silly since the potential impact is on 2019 revenues, which may be replaced by other higher margin orders. I would anticipate these stocks will recoup their declines in short order.
    11 Jun 2014, 08:05 PM Reply Like
  • joegillam
    , contributor
    Comments (1182) | Send Message


    Did you know that the 737 is designed on the 707 which is a 1956 design?


    Joe In Georgia
    11 Jun 2014, 10:59 PM Reply Like
  • HiloHawaiian
    , contributor
    Comments (84) | Send Message
    It's funny. Seeking Alpha is quick to delete any post it deems not be "adding to the discussion", yet Thomas posts the same blather each time there's a Boeing item. On and on and on. Boeing bad, Airbus good. So, Seeking Alpha, I'm asking you to apply that rule to all...
    12 Jun 2014, 08:25 PM Reply Like
  • GarryGR
    , contributor
    Comments (350) | Send Message
    Thomas hits multiple sites, check out this one: Boeing Shares Suffer with Cantor's Surprise Loss for more oldies but goodies. ;-)
    15 Jun 2014, 04:16 AM Reply Like
  • kata
    , contributor
    Comments (1535) | Send Message
    BA gets order from CEA for 7.5B, 80 737's.
    15 Jun 2014, 08:18 PM Reply Like
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