While the news these days has been a litany of woes for Boeing (BA), there have been some occasional bright spots for the aerospace firm. In fact, one of these just showed up today, and it turns out Boeing is still a major player in China.
Granted, Boeing has had plenty of problems getting planes out the door. But that has not stopped the orders from coming in. Sure, that is likely more attributable to Boeing’s status as half of a functional duopoly with Airbus (EADSY), but there are still plenty of airlines buying Boeing. And while the Chinese market has been…difficult…lately with United States businesses, Boeing is still making sales and deliveries within the country.
All that is good news, and with that in mind, it is a small wonder that Boeing considers China to be a “key market,” especially with China accounting for one in every five narrow-body jet deliveries on Earth. Furthermore, with China going so far as to adjust its tariff policies to keep off of Boeing, it is clear that China considers Boeing a key supplier.
Boeing Out of Defense?
If you think I have lost my mind with the subheading above, you are not alone. But there are some out there suggesting that, perhaps, the path to victory for Boeing lies in divesting its military operations. That seems counterintuitive at first blush, but there are some potential positives in getting Boeing out of defense.
First, there is the notion that Boeing’s defense operations are already in decline. Indeed, its defense arm is actually 20% smaller than it was 10 years ago, and we know that there has not been much reduction in demand for firepower. This led Quilty Space analyst Chris Quilty to say, “I wouldn’t be entirely surprised if they spun out or sold off the Defense & Space business as a way to mitigate their sprawling problems.”
Is Boeing a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 24.96% loss in its share price over the past year, the average BA price target of $217.47 per share implies 25.57% upside potential.
