Boeing Holds On as Dow's Top-Performing Stock

Investing

Published: June 16, 2018 8:37 am

Last Updated: January 11, 2020 10:16 pm

The Boeing Co. (NYSE: BA) held on to its ranking as the top-performing stock among the Dow 30 last week, even though it ranked among the bottom five performers for the week. The company’s shares shed just over 3.1% in what was a good week for the index itself. For the year to date, Boeing shares have gained 21.4%.

The second-best performer among the Dow index equities so far this year is Nike Inc. (NYSE: NKE), up 21.3%; followed by Intel Corp. (NASDAQ: INTC), up 19.4%; Visa Inc. (NYSE: V), up 18.5%; and Microsoft Corp. (NASDAQ: MSFT), up 17.1%. Of the 30 Dow stocks 13 have managed to post a gain to date in 2018.

The Dow dropped more than 225 points over the course of the past week to close at 25,316.53, down about 0.9%. For the year to date the tech sector has added 14.1%, best among the 10 market sectors.

Boeing’s week began with some bad news from Rolls-Royce about the British firm’s Trent 1000 engine, the one that powers the 787. The company found another problem with the engine that has left some 50 787s parked engineless on the ground waiting for parts. Boeing uses new engines with replacement parts on new planes rolling off the assembly line. While this keeps the company’s cash flow at expected levels, airlines with planes on the ground that they’ve already paid for may get restive.

The tariffs outlined on Friday and their imposition beginning July 6 will also affect Boeing although its not clear by how much. In the past when China and the United States had a spat, the Chinese would switch their new orders to Airbus and state media have indicated Boeing should expect the same thing this time.

Airplanes are not on the list of retaliatory products that will be subject to Chinese tariffs. Some parts that Boeing uses to manufacture its 737s and 787s are imported from China and subject to U.S. tariffs, but the impact on the total cost of the planes is minimal.

Boeing’s shares closed up about 1.3% Friday at $357.88 in a 52-week range of $191.37 to $374.48. The consensus 12-month price target on the stock is $398.13 and the forward price-earnings ratio is 20.85.