Boeing Seems to Be Flying Past Tariff Troubles
Boeing shares have taken flight despite tariffs, as earnings come in solid.
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Sometimes, breaking even is winning.
That’s the case with Boeing BA. Shares of the Virginia-based manufacturer of aircraft and defense products are virtually unchanged since the start of the year.
Boeing is outperforming the S&P 500 and the Nasdaq Composite, which have respectively lost -8.6% and -13.5% so far this year. Boeing is also beating the Dow Jones Industrial Average, which has dropped -6.7% year to date. The Russell 2000 is the weakest index, losing -14%.
Let’s face it: Boeing is a widely disliked stock. In 2024, the company’s shares fell by 32%, as the major indexes soared to record highs. Despite this, I chose Boeing as my first buy for 2025, as shares appeared to be oversold and undervalued.
Tariffs Are a Headwind
As is the case with many stocks, tariffs are a major concern. Earlier this week, China announced it was no longer accepting delivery of Boeing products amid its trade dispute with the U.S.
The U.S. has imposed tariffs of 145% on China’s goods. China retaliated with a 125% import tax, dramatically raising the cost of Boeing planes to potential buyers in that country.
While China’s refusal to accept the aircraft may sound ominous, Boeing CEO Kelly Ortberg seems unconcerned:
“We have many customers who want near-term deliveries, so we plan to redirect the supply to the stable demand, and we’re not going to continue to build aircraft for customers who will not take them,” said Ortberg.
Boeing Beats the Street
Boeing shares jumped 6% on Wednesday, after the company beat analysts’ estimates for earnings and revenue. The .49 cent per share loss was far better than the expected loss of $1.18 per share, and revenues jumped by 18%.
Wall Street approved of Boeing’s earnings report, and launched the stock above its 50-day (blue line below) and 200-day (red line below) moving averages.
Boeing’s next major resistance area is near $188. If Boeing can soar past that figure, the stock will reach a new 52-week high.
In a market where many prominent stocks are trading well off their highs, Boeing is holding up well by comparison. The true test will occur if and when markets are able to correctly reflect the effects of tariffs — something which has been largely guesswork to this point. But at least in terms of market direction, Boeing finally appears to be escaping the turbulence that has surrounded it.
At the time of publication, Ponsi was long BA.
