That was over quick. And by that, of course, I mean the ban on aerospace stock Boeing (BA) planes in Chinese airlines. China has officially cleared the way for Boeing aircraft to return, and just in time to watch planes it could have taken in weeks ago get shuffled off to someone else. But the news was good enough for Boeing shareholders, who sent shares gaining nearly 3% in Tuesday afternoon’s trading.
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Recent trade talks with the United States pulled a lot of the teeth out of tariffs on both sides, and without that huge cash grab kicking in, Beijing gave free rein to its airlines to pick up Boeing aircraft once more. Sufficiently free rein, in fact, that the individual airlines have been permitted to reach their own terms, including delivery dates.
The latest tariffs are now set at 30% on goods coming from China into the United States, and 10% in the opposite direction. Though reports note that this is a temporary reprieve, for the time being, both sides now have three months to organize a full and proper solution. But given that Boeing’s backlog now extends back several years, that three-month lag may not be enough should China and the United States fail to reach a longer-lasting accord.
Deliveries Still Brisk
Meanwhile, word came out about Boeing deliveries for April, and the news was solid enough. Boeing managed to deliver 45 aircraft that month, That is actually up from the 41 delivered in March, and also up from the 44 delivered in April. In fact, two planes—a 737 Max and a 777 freighter—actually managed to hit China before the whole tariff thing kicked in to begin with, reports noted.
And Boeing also managed to pare down its backlog. On March 31, the number stood at 5,648 aircraft outstanding. Now, it stands at 5,643. Not much of a move, granted, but a move nonetheless. Boeing has been working to ramp up its production numbers to even reach the cap the Federal Aviation Administration has on it. This will be a crucial part of Boeing’s move to get that cap lifted, eventually.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 9.83% rally in its share price over the past year, the average BA price target of $203.35 per share implies 0.47% downside risk.
