Boeing Inc. ($BA) Stock | Shares Plunge On SEC Probe


Boeing Inc. (NYSE: BA)



Boeing News & Technicals

BA Chart

During the trading day Thursday shares of Boeing (BA) took a sharp dip on news that the SEC was conducting an accounting probe related to the 787 Dreamliner and 747 jumbo aircraft. When the news was released shares were trading around the $112 range before they dropped nearly 9% to intra-day lows of $102.10 but were able to regain some of the losses and close the day at $108.44, a 6.8% drop from yesterdays close of $116.36. Shares of BA haven’t traded this low since 2013 but have run into a decent level of support here and got a nice bounce off the $103 level.Bloomberg reported earlier Thursday, citing people with knowledge of the matter, that the SEC is probing whether Boeing properly accounted for the costs and expected sales, and its projections on the long-term profitability, of its two jetliners. (MarketWatch) I would expect BA to recover from this as the market usually overreacts on news like this. BA recently received downgrades from JP Morgan and RBC following earnings but currently the average price target is $147.10. Boeing is still a great company and this to me looks like a possible opportunity to get in at basement prices. We saw the support come in at the $103 level and should expect some more at $100 while resistance will be met at $113.30, $116 and $120.


Analyst Comments

“This is not good news, and adds to what is already proving to be a tough year for Boeing,” RBC Capital analysts wrote in a note to clients. “The SEC may of course decided not to take things further, but they could of course also decided to take action. A big adjustment to Boeing’s accounting would probably not have a cash impact, but we [think] it would not be positive for investor sentiment.” 

BA Profile

The Boeing Co. is an aerospace company that manufactures commercial jetliners and defense, space and security systems. Its products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performance-based logistics and training. The company is organized into two business units: Boeing Commercial Airplanes and Boeing Defense, Space & Security. The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, principally to the commercial airline industry worldwide. It produces commercial aircraft and offers a family of commercial jetliners designed to meet a broad spectrum of passenger and cargo requirements of domestic and non-U.S. airlines. This family of commercial jet aircraft in production includes the 737 narrow-body model and the 747, 767, 777 and 787 wide-body models. Its Defense, Space & Security business provides end-to-end services for large-scale systems that enhance air-, land-, sea- and space-based platforms for global military, government and commercial customers. In addition to designing, producing, modifying and supporting fighters, bombers, transports, rotorcraft, aerial refuelers, missiles, munitions and spacecraft for military, civil and commercial use, it is developing enhanced capabilities through network-enabled solutions, communications and intelligence, surveillance and reconnaissance technologies. Its Defense, Space & Security business comprises three segments: Boeing Military Aircraft, Network & Space Systems and Global Services & Support. The Boeing Military Aircraft segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for global strike, including fighter and combat rotorcraft aircraft and missile systems; global mobility, including tanker, rotorcraft and tilt-rotor aircraft; and airborne surveillance and reconnaissance, including command and control, battle management and airborne anti-submarine aircraft. The Network & Space Systems segment is engaged in the research, development, production and modification of the following products and related services: electronics and information systems, including command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions, and intelligence systems; strategic missile and defense systems; space and intelligence systems, including satellites and commercial satellite launch vehicles; and space exploration. The Global Services & Support segment provides customers with mission readiness through total support solutions. Its global services business sustains aircraft and systems with a full spectrum of products and services through integrated logistics, including supply chain management and engineering support; maintenance, modification and upgrades for aircraft; and training systems and government services, including pilot and maintenance training. The Global Services & Support segment’s international operations include Boeing Defence UK Ltd., Boeing Defence Australia, and Alsalam Aircraft Co., a joint venture. The Boeing Capital segment facilitates financing they need to buy and take delivery of their Boeing product and manages overall financing exposure. BCC’s portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments. The Other segment includes the unallocated activities of Engineering, Operations & Technology and Shared Services Group, as well as intercompany guarantees provided to Boeing Capital. The Engineering, Operations & Technology provides technical and functional capabilities, including information technology, research and development, test and evaluation, technology strategy development, environmental remediation management and intellectual property management. The company was founded by William Edward Boeing on July 15, 1916 and is headquartered in Chicago, IL. (MarketWatch)