Boeing Can Absorb China Trade Shock

(16min)

Summary

  • Boeing's stock fell due to halted deliveries to China, but near-term offsets limit the impact, highlighting strong airplane demand despite trade tensions.
  • China's economic growth is somewhat underwhelming, making it easier to refuse deliveries as demand for airplanes is modestly lower.
  • Long-term risks include potential reduced demand from a prolonged trade war, but Boeing's strong market position and global demand offer resilience.
  • Boeing remains crucial for reducing trade deficits, with a positive long-term outlook if trade relations improve, despite potential short-term stock volatility.
  • Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More »
Boeing 737-7 MAX, N7201S. Farnborough International Airshow, July 16, 2018

Wirestock

The Boeing Company (NYSE:BA) stock initially fell on the news that China would no longer take delivery of Boeing airplanes. China is an important market for airplanes and plays an important role in the reduction of Boeing’s inventory

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This article was written by

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Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BA, EADSF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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