Morgan Stanley downgrades Boeing on slowdown of orders

BoeingOn 6th March 2017, there has been a decline in the military sales and asset base, and we have recommended all our traders to buy a put position in the stocks of Boeing Co (NYSE: BA) which is an aircraft manufacturing company.

At that time, the stock of the company was trading around $182. The coming week, trade ended with a profit, but the shares fell to a figure of $176.

It is likely that the company stocks will decline further in the coming time and Boeing Co is experiencing another fresh set of problems which is explained below.

This Illinois-based company has served a notice to all its workers regarding layoff in its Washington state factories where commercial jets are manufactured. The 60 days notice will come into effect from May, but official dates are yet to be confirmed. The company is experiencing a slowdown in the orders for its twin-aisle jets that includes 787 and 777 Dreamliners. One can understand the extent of this impact by a decrease of 60% in the production of current generation 777. As on date, it is the most profitable jumbo jet for the company where the workforce of jetliners trimmed by approximately 9% last year.


In an endeavour to enter the profitable aviation market which is estimated at $96 billion, the Commercial Aircraft Corp of China has developed a single-aisle passenger jet with 168 passengers. As per Safran SA which is an aircraft engine manufacturer, the testing of the flight is likely to take place by the end of next month.

SpaceX has won the contract of launching the Second GPS III Satellite of US Air Force. It is to be noted that the contract for the First GPS III Satellite was also won by the same company in the year 2016 May where it quoted an amount of $82.7 million. The US Air Force was expected to pay a maximum amount of $140 million for the launch of Second GPS III Satellite. SpaceX won the contract by quoting a price of $96.5 million. United Launch Alliance (ULA) which is a space venture jointly owned by Lockheed Martin (NYSE: LMT) and Boeing has said that they were unable to charge anything lower than $200 million even for the Atlas V mission. With the loss of contract, it is likely to hurt the top line of Boeing a lot. Therefore, it is expected that a slowdown in order inflow and decline of US Air Force contract will keep the stocks of this company in bearish orbit.

If we consider the slowdown experienced by the company and 25% increase in prices of stock since November 2016, the Morgan Stanley’s analysts have downgraded the shares to “Equal Weight” before “Overweight” rating.

If you see the price chart, the Boeing stocks have broken the ascending channel, and the resistance is at 182. The declining stochastic oscillator and the trend line with lower slope indicate that the stock will dip a level in the coming time. The support on the downside exists at 169.

Boeing Stock Price - March 22nd, 2017

Boeing Stock Price – March 22nd, 2017

So, if you are a binary trader, you can pick up a PUT Option with your reliable broker. The chances of success are high if you select the expiry period as of March 30th. It will be ideal if you purchase the stocks when it is trading at $176 in New York Stock Exchange (NYSE).

Rich Archer

Rich Archer

Hi, my name is Rich Archer. I am living in London. Welcome to Binary Manual. Reach to Binary Options broker reviews and market news here.

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