This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Do Boeing Investors Have Their Heads in the Sand?

CHICAGO (TheStreet) -- The Boeing (BA) 787 has been grounded for three weeks, investigators still can't find a cause for its two lithium-ion battery fires and on Tuesday All Nippon Airlines, the biggest 787 operator with 16 aircraft in its fleet, seemed to throw up its hands as it announced that starting in March it will serve a new selection of premium tea and sake on its international flight.

Boeing investors don't seem all that worried. On Tuesday, Boeing shares closed at $75.89, up about 1% from the previous day's close. At mid-morning Wednesday, shares were trading at $75.83, down 6 cents.

Amazingly, Boeing's share price is virtually unchanged from its opening price of $76.21 on Jan. 15, the day before the Federal Aviation Administration grounded the 787 airplane.

Another amazing fact is that during the Boeing earnings call on Jan. 30, the company said it would deliver 60 of the planes this year; boost 787-8 production to 10 a month by the end of the year; begin production of a newer, bigger model, the 787-9; and review the outlook for the 787-10.

At times in its history, Boeing has been well-served by its ambition and confidence. But there is a case to be made that the 787 program is not, at this moment, a place where investors should retain their confidence.

"We believe the disruptive effect on Boeing's commercial aircraft business over the next 12-18 months is going to be far greater than the market is currently assuming," wrote BB&T Capital Markets analyst Carter Leake, in a report issued Monday.

Leake, a longtime Boeing booster, downgraded shares to hold from buy on Jan. 7 and to underweight from hold on Jan. 17. "We have complete confidence in Boeing's ability to ultimately rectify any problems, but neither we, nor anyone on the street, has any idea as to complexity, cost and impact of any such fix," Leake wrote at that time.

In his report on Monday, Leake reiterated his view that the share price faces long-term obstacles. "We remind investors that just having the 787 fly again moves us from 'disaster mode' to 'caution mode' as any smoke incident after an un-grounding will almost certainly elicit capitulation selling," he wrote.

Stock quotes in this article: BA 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs