Boeing’s Stock Falls Amidst Chinese Trade Controls
If there were any hopes that 2025 would be a better year for aerospace stocks like Boeing, it seems those hopes are still alive. However, with the new year just underway, the news isn’t looking good, as China has imposed trade controls on Boeing.
According to reports from The New York Times, Boeing was among dozens of US companies hit with trade controls. This includes 28 companies listed under “dual-use” items, which have both military and civilian applications. Another 10 companies were placed on the “unreliable entities” list, related to arms sales made to Taiwan.
It’s little surprise to see Boeing make this list given its entire defense division. However, Control Risks consultant Andrew Gilholm noted that most of these listed companies will face minimal impact from being on the list, as many were already subject to sanctions.
The Mounting Chinese Threat to Boeing
Boeing may have a new competitor emerging in the Chinese operation known as Comac, which has already built one plane in the C919. Comac is now stepping up its operations and taking on other countries by opening new offices in potential client countries. It’s also working to get certifications from overseas agencies that manage aircraft worthiness.
This could potentially allow Comac to skim some business away from Boeing and its rival Airbus. The C919 has less range and fewer seats than its competitors, but it may serve airlines well for shorter flights. Additionally, having another source of supply could be beneficial, especially considering Boeing’s backlog.
Is Boeing a Good Stock to Buy Right Now?
Analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, seven Holds, and one Sell in the past three months. After a 29.91% loss in its share price over the past year, the average BA price target of $193.16 per share implies 12.5% upside potential.
Market Radar Take
Boeing’s stock is facing challenges from Chinese trade controls and increasing competition from Comac. While analysts remain optimistic about the stock’s future, it’s essential to carefully consider these factors before making any investment decisions.
Leave A Comment