When a headline that everyone anticipated would be larger appears on a trading floor, there’s a certain kind of silence. Last week, Boeing was followed by that quiet. In Beijing, President Trump announced an order for 200 Boeing aircraft while shaking hands with Xi Jinping. Since 2017, it was the first major Chinese order. It should have been a victory by most standards. Rather, by the closing bell, BA stock had dropped by about 4.7%, reaching $229.21 before continuing to decline in the days that followed. By Sunday, the stock was trading at about $220, and the atmosphere surrounding it had subtly deteriorated.
Finding the cause is not difficult. The market was primed for something closer to 500 jets over the course of weeks by analysts, with some reports putting the figure as high as 750. Therefore, traders did what traders do when the actual figure hit 200. They asked questions after making a sale. China has a long history of announcing aircraft deals that never quite materialize into firm contracts, so it’s possible the market was just being honest about something Wall Street has known for a while. Senator Rick Scott publicly warned about Beijing’s history of breaking agreements. Once it becomes ingrained in a stock’s story, that kind of skepticism is difficult to overcome.
As this develops, it’s difficult to ignore how much Boeing’s comeback still hinges on unwritten stories. Renton and Everett factories are operational. Production is getting better. There is a huge backlog of 737 MAXs. However, there seems to be a footnote attached to every piece of positive news. In an effort to bring engineers closer to decision-makers, one shareholder formally suggested relocating the corporate headquarters to the Seattle region earlier this year following the Alaska Airlines Flight 1282 incident. It was firmly rejected by the board. It will take years to determine whether that was the correct decision or a stubborn one.
But the more prominent question is the one about China. For years, Airbus has been subtly outperforming Boeing in that market by operating an assembly plant in Tianjin and securing hundreds of orders while Boeing was mired in trade disputes and grounded by the MAX crisis. Even if they are not committed, 200 jets is a significant number. a base. A door opened again. However, given what investors had been told to expect, Jim Cramer, who is never one for half-measures, described the deal as a notable disappointment. He’s not incorrect. As things stand, the order won’t affect Boeing’s backlog until certain airlines sign certain documents.
Additionally, the company is facing a lawsuit from Polish Airlines alleging that Boeing covered up safety issues with the 737 MAX. In a related case, a U.S. jury recently awarded $49.5 million. Investors appear to think these are doable. Until they are proven wrong, investors are typically correct. The gradual deterioration of trust that results from years of crashes, groundings, lawsuits, and leadership changes is more difficult to handle. Since taking over as CEO in 2024, Kelly Ortberg has been quietly rebuilding production discipline. More often than not, the results appear in earnings reports rather than headlines.
The stock is still rated as a buy by analysts on average, with a twelve-month price target close to $270. Only one of them advises selling, while twenty-one are bullish. Although it also indicates that everyone is moving in the same direction at the same time, that type of consensus typically has some significance. Boeing is no longer as profitable as it once was. Everyone is aware of that. However, the defense business continues to grow, the order book is massive, and the company continues to be the biggest exporter in the US by dollar value. The survival of Boeing is not the question. It’s the amount of time investors are prepared to wait for the promised version of the business.
