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Two Ways To Play: Boeing Loses Altitude


Strengthen your portfolio in good times and bad.

Boeing's (BA) stock dropped the most in five years today. According to Bloomberg, Goldman Sachs cut the number 2 commercial plane maker on concerns that high fuel costs and economic headwinds would slow orders.

In a note to clients, Goldman said there is a 21% downside potential in its new $60 12 month price target. The stock was cut from "neutral" and placed on the firm's "conviction sell list."

Dozens of airlines have collapsed or filed for bankruptcies. Further, JetBlue (JBLU) and other airlines have postponed taking deliveries of ordered planes placing more risk on Boeing's backlog. Goldman Sachs estimates orders may drop 50% by the end of this year and next.

BA closed -6.89% to $69.64.

See Hoofy and Boo's take on The Unfriendly Skies.

From the Bull Pen: Is General Dynamics (GD) the better play in this sector? Sell-stops can be placed below $85.

From the Bear Cave: Bears believe the situation looks grim for Boeing. Bears can press the downside with a target near $66 which would correspond with the January 2006 lows.
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No positions in stocks mentioned.

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