Shares of Boeing (BA) have tumbled from $351.01 on January 17 to close at $334.69 today. I’m using the pull back to add shares to my Jubak Picks portfolio tomorrow, January 25.
The Boeing story right now is one of multiple tailwinds pushing the stock higher. A weak dollar is a plus to exporters. The Tax Cuts and Jobs Act will cut Boeing’s effective tax rate to 20% from the 30% recorded in the third quarter of 2017. And air craft deliveries are forecast to rise to 900 a year in 2020 from 750 in 2017 plus Boeing’s defense business looks to be one of the winners from Trump administration military budgets. (The company has also recently announced a joint venture with Adient (ADNT) to develop, manufacture and sell a portfolio of seating products a new and retrofit equipment to airlines and aircraft leasing companies.)
The big danger here is from a global trade war set off by the protectionist policies of the Trump administration that lowers global economic growth. I think that’s unlikely but not impossible. Something to watch closely.
My target price is $430. The company next reports earnings on January 31.