What Happened?
Shares of aerospace and defense company Boeing (NYSE:BA) rose in the morning session after the company reported fourth-quarter results. The company posted revenue of $23.95 billion and an adjusted profit of $9.92 per share, crushing analysts' forecasts. On the other hand, the strong performance was likely overshadowed by an underwhelming outlook, with analysts expecting revenue growth to slow to 7.2% over the next 12 months.
After the initial pop the shares cooled down to $252.49, up 1.6% from previous close.
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What Is The Market Telling Us
Boeing’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock dropped 10.1% on the news that China imposed a 34% tariff on all U.S. imports amid escalating trade war tensions. This was partly in response to the "reciprocal tariffs" announced by the Trump administration the previous day, with levies on Chinese goods estimated to be as high as 50%. Already facing increased competition from domestic aircraft manufacturers, Boeing risked becoming even less competitive. Also, China has historically been a significant source of demand for Boeing's commercial aircraft, and the new tariffs could delay or derail future orders. For investors, this development raised concerns about Boeing's ability to regain momentum in a market essential to its growth.
Boeing is up 10.8% since the beginning of the year, and at $252.49 per share, has set a new 52-week high. Investors who bought $1,000 worth of Boeing’s shares 5 years ago would now be looking at an investment worth $1,301.
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