Boeing All Done Growing?

CHARLOTTE, N.C. -- Despite some recent positive developments for Boeing (BA - Cramer's Take - Stockpickr), a faltering world economy has cast doubt on the outlook for its business growth.

Last week, the Everett, Wash.-based aircraft maker learned it may get another chance to bid on a $35 billion re-fueling tanker contract with the U.S. military. It also announced it has switched on the power on its first 787 Dreamliner, a milestone that allows for critical systems testing of the plane, which has experienced several delays that have pushed expectations of its first delivery from mid-2008 to the third quarter of 2009.

In Everett, the mood has shifted. The week's events reinforced the self-image of a company that seems to enjoy immunity from the normal vagaries of business, protected by a huge backlog of orders, which is the result of being one of just two worldwide manufacturers of big jets, for which demand shows no sign of slackening.

Or does it?

Many Boeing analysts now suggest that a downturn in the airline business, in the face of high oil prices and slackening demand, will impact aircraft orders.

On Wednesday, Boeing shares fell precipitously, down $5.15, or 6.9%, to $69.64, after Goldman Sachs analyst Richard Safran put Boeing on the firm's "conviction sell" list.

Questioning Growth Prospects

"We expect the weak macroeconomic backdrop and record fuel prices to hurt airlines and translate to a significant slowing in the order book," Safran wrote. He added that the 787 remains a risky bet, given that it has yet to enter flight testing, and he set a price target of $60 over the next 12 months.

Goldman has a financial relationship with Boeing that includes providing investment banking services and making a market in its shares.

Safran joined a chorus of analysts who have recently questioned Boeing's outlook.