Boeing shares slip after first 'underperform' rating since 2009

Tue Sep 2, 2014 11:39am EDT
 
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By Alwyn Scott

NEW YORK (Reuters) - Boeing Co BA.N shares slipped 1.3 percent on Tuesday after a pair of downgrades from highly ranked analysts, including one who cut the stock outlook to "underperform."

The underperform rating by The Buckingham Research Group, a New York-based broker-dealer, marked the first such rating for Boeing's stock since 2009, according to data by Thomson Reuters. In 2009, Boeing was suffering from delays in bringing its 787 Dreamliner to market.

Buckingham also cut its price target for Boeing shares to $101, well below the current price of over $125. The shares were down 1.3 percent in morning trading on the New York Stock Exchange.

Analyst Richard Safran, ranked third among 23 Boeing analysts for estimate accuracy and recommendation performance, wasn't immediately available for comment. In February, he cut his Boeing price target to $132 from $142, saying investor expectations were "being set too high."

Boeing shares rallied 80 percent in 2013, but have fallen about 8 percent this year as investors reassessed the large order book and rising output of Boeing and rival Airbus Group NV AIR.PA, with many concluding that most of the good news was already priced into the stock.

Boeing's share price received a downgrade on Tuesday from RBC Capital Markets, which cut its target price for the stock to $134 from $145. RBC also cut the price target for Airbus to 51 euros from 59 euros.

Investor sentiment toward Airbus and Boeing "is likely to remain muted, as there is concern over the visual headwind of declining orders, and increased cancellations, despite the record backlogs," RBC analyst Robert Stallard wrote in a note that included upgrades to several suppliers and defense companies, including Spirit Aerosystems Holdings Inc SPR.N, Lockheed Martin Corp LMT.N and Northrop Grumman Corp NOC.N.

The target price for Boeing has dipped to $152.86 among analyst tracked by Thomson Reuters, down from $154.14 a month ago.   Continued...

 
The Boeing logo is seen at their headquarters in Chicago, April 24, 2013.  REUTERS/Jim Young