Stock Market News – Boeing in focus ahead of earnings release; trade developments important for the outlook
July 24, 2018 3:26 pm
Boeing’s earnings report for Q2 2018 will be hitting the markets before Wednesday’s US market open. The consensus recommendation for the company is “buy”, in line with the average consensus recommendation for the Aerospace & Defense peer group.
According to analysts submitting their projections to Thomson Reuters’ estimate system (the Institutional Brokers’ Estimate System – I/B/E/S), the plane maker is forecast to have made $3.27 in earnings per share (EPS) during the quarter ending in June, which reflects a drop from $3.47 expected four weeks ago. Nevertheless, if the corporation’s bottom line matches expectations, this would represent an increase of 28.2% relative to the corresponding quarter from last year when the firm earned $2.55 per share. Additionally, analysts’ EPS forecasts range from $3.04 to $3.51. It is of note that Boeing delivered an EPS beat in all four previously reported quarters.
Beyond earnings, investors will be paying attention to other information included in the firm’s quarterly report, with the revenues and free cash flow figures being among those closely monitored; a revenue breakdown chart is presented below. The two are projected at $24.04 billion and $2.11bn respectively. In the meantime, management guidance will also be watched, with expectations running high among Wall Street analysts that the corporation will raise its full-year profit guidance.
Overall upbeat data by the plane manufacturer are likely to spur long positions in the company’s stock, with resistance to advances potentially coming around the six-week high of $361.86 hit on July 18. More bullish movement would increasingly bring into scope June 7’s record high of $374.48. Conversely, downside pressure could emerge in case of disappointing figures, with immediate support to declines possibly coming around the current level of the 50-day moving average at $350.60. In the event of steeper losses, additional support could come around the 100-day MA at $342.85; the region around this point was congested during April and May. Further below, the near three-month low of $327.29 from late June would increasingly come into view.
Another area of interest that could cloud the outlook is the ongoing trade dispute between the US and China. The fear is that China would choose Airbus – a European company – over Boeing in placing future orders, or cancel existing orders with Boeing. For the record, the Chinese aviation market is the world’s second-biggest, with expectations being that it will surpass the size of the US equivalent over the coming years.
Evidently, Boeing’s shares have in the past suffered on the back of escalating trade tensions, with market participants apparently viewing them as a proxy for growing/easing concerns relating to the US-China spat. One such occasion was on June 19; as can be seen from the chart on top, Boeing tumbled by 3.8% as President Trump ratcheted up his rhetoric on that day, requesting an additional list of Chinese goods to be subject to tariffs.
Despite the occasional falls though, it is also the case that the stock remains largely resilient to the rising risks of a full-blown trade war between the world’s two largest economies. Specifically, year-to-date, it is up by 20.8%, rendering itself the fourth best Dow performer behind Microsoft, Visa and Nike. For perspective, the Dow is up by only 2.0% throughout the same period. Moreover, Boeing is the blue-chip index’s lead gainer over the past year, trading higher by a whopping 67.9%.
Boeing is also outperforming the S&P 500, which is up by 5.7% in the year-to-date. Taking a longer-term perspective, the reinvested total return from an investment in the firm five years ago would have yielded an impressive 275.6%, which positively compares to the S&P’s 83.6%.
Other big names releasing quarterly results on Wednesday are tech giants Facebook and Qualcomm; both companies’ reports will be made public after the closing bell on Wall Street.
Boeing’s earnings report for Q2 2018 will be hitting the markets before Wednesday’s US market open. The consensus recommendation for the company is “buy”, in line with the average consensus recommendation for the Aerospace & Defense peer group.
According to analysts submitting their projections to Thomson Reuters’ estimate system (the Institutional Brokers’ Estimate System – I/B/E/S), the plane maker is forecast to have made $3.27 in earnings per share (EPS) during the quarter ending in June, which reflects a drop from $3.47 expected four weeks ago. Nevertheless, if the corporation’s bottom line matches expectations, this would represent an increase of 28.2% relative to the corresponding quarter from last year when the firm earned $2.55 per share. Additionally, analysts’ EPS forecasts range from $3.04 to $3.51. It is of note that Boeing delivered an EPS beat in all four previously reported quarters.
Beyond earnings, investors will be paying attention to other information included in the firm’s quarterly report, with the revenues and free cash flow figures being among those closely monitored; a revenue breakdown chart is presented below. The two are projected at $24.04 billion and $2.11bn respectively. In the meantime, management guidance will also be watched, with expectations running high among Wall Street analysts that the corporation will raise its full-year profit guidance.
Overall upbeat data by the plane manufacturer are likely to spur long positions in the company’s stock, with resistance to advances potentially coming around the six-week high of $361.86 hit on July 18. More bullish movement would increasingly bring into scope June 7’s record high of $374.48. Conversely, downside pressure could emerge in case of disappointing figures, with immediate support to declines possibly coming around the current level of the 50-day moving average at $350.60. In the event of steeper losses, additional support could come around the 100-day MA at $342.85; the region around this point was congested during April and May. Further below, the near three-month low of $327.29 from late June would increasingly come into view.
Another area of interest that could cloud the outlook is the ongoing trade dispute between the US and China. The fear is that China would choose Airbus – a European company – over Boeing in placing future orders, or cancel existing orders with Boeing. For the record, the Chinese aviation market is the world’s second-biggest, with expectations being that it will surpass the size of the US equivalent over the coming years.
Evidently, Boeing’s shares have in the past suffered on the back of escalating trade tensions, with market participants apparently viewing them as a proxy for growing/easing concerns relating to the US-China spat. One such occasion was on June 19; as can be seen from the chart on top, Boeing tumbled by 3.8% as President Trump ratcheted up his rhetoric on that day, requesting an additional list of Chinese goods to be subject to tariffs.
Despite the occasional falls though, it is also the case that the stock remains largely resilient to the rising risks of a full-blown trade war between the world’s two largest economies. Specifically, year-to-date, it is up by 20.8%, rendering itself the fourth best Dow performer behind Microsoft, Visa and Nike. For perspective, the Dow is up by only 2.0% throughout the same period. Moreover, Boeing is the blue-chip index’s lead gainer over the past year, trading higher by a whopping 67.9%.
Boeing is also outperforming the S&P 500, which is up by 5.7% in the year-to-date. Taking a longer-term perspective, the reinvested total return from an investment in the firm five years ago would have yielded an impressive 275.6%, which positively compares to the S&P’s 83.6%.
Other big names releasing quarterly results on Wednesday are tech giants Facebook and Qualcomm; both companies’ reports will be made public after the closing bell on Wall Street.
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