If there were any hope that 2025 would be better for aerospace stock Boeing (BA) than 2024 was, well…I guess there is still hope. But with the new year now in its second day, the news is not looking good, as China hit Boeing with a set of trade controls that would limit its presence in the country. And Boeing shares fell over 3% as a result.
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The word from the New York Times noted that Boeing was among “dozens” of United States companies that had been hit with trade controls. The report noted that 28 such companies found themselves on that list, with the export of “dual use” items—items that have military applications as well as civilian applications—on the list. Another 10 companies were placed on the “unreliable entities” list, which connected to arms sales made to Taiwan.
Since Boeing has an entire defense division, it is little surprise to see them make at least one of those lists. However, as Control Risks consultant Andrew Gilholm noted, most of these listed companies will see little actual impact from being listed. After all, Gilholm noted, “…most of this is probably at the symbolic level because so many of these entities were already subject to sanctions.”
The Mounting Chinese Threat to Boeing
We have also heard previously that Boeing may have a new competitor coming from the Chinese operation known as Comac, which has already built one plane in the C919. But now, Comac is stepping up its operations and taking on other countries, with reports noting that it is opening up new offices in potential client countries. It is also working to get certifications from the various overseas agencies that manage aircraft worthiness.
It may even have a useful market niche that will allow it to skim some of the business away from Boeing and its immediate rival Airbus (EADSY), noted a report from the Financial Times. The C919 has less range, and fewer seats, than its competitors at Boeing and Airbus. But that may serve some airlines well, especially in terms of shorter flights. Plus, having another source to turn to could be helpful, especially considering Boeing’s backlog.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, seven Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 29.91% loss in its share price over the past year, the average BA price target of $193.16 per share implies 12.5% upside potential.
