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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Boeing's Problem: What Do You Do for an Encore After Dubai?


Major Singapore orders or not, Boeing appears to have entered a more stable period, with fewer peaks and valleys. "The decade out in front of us looks more stable than any decade I've seen in this industry," McNerney said, citing "strong market stability in our production environment only executing derivatives, not taking big development risks, which enables us to drive productivity and partnering for success on a more sustainable basis."

On Wednesday, Boeing ramped up production of a most-established prized product, the 737, to 42 airplanes a month. Since 2010, production of the 737 has increased from 31.5 airplanes a month to 42, with production scheduled to increase to 47 airplanes a month in 2017.

Also contributing to stability is the 10-year deal Boeing signed last month with the International Association of Machinists, after an agonized period when Boeing threatened not to put 777X work in Seattle, where most of its workers are. "We now have this unbelievable 10-year opportunity," McNerney said. "When we have a strike for six weeks, it costs us a couple of billion dollars."

As for 787 problems, McNerney said the company has been "adding people down in Charleston over the last couple of days to address a bottleneck we have in the mid-body assembly area, which I view as not any sign that the 787 is off the rails. This is what we do all the time, find bottlenecks and fix them." He said the mid-body is the aircraft section with the most differentiation between the 787-8 and the 787-9.

Sterne Agee analyst Peter Arment said he considers Boeing's pullback to represent a buying opportunity. He said Boeing faces the problem of selling current 777s when the updated 777X is projected to enter service around 2020, but said Boeing has the ability to discount the current model in order to maintain production flow, just as it has done for airlines anticipating the 737MAX.

Shares currently trade at a multiple of 16.5 times consensus 2014 earnings as estimated by Thomson Reuters. "We believe Boeing stock has solid valuation support at current levels and investors should get very aggressive if BA stock breaks $120 per share in this current market sell-off," Arment wrote recently, with shares trading at $123.08.

Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc

2 of 2

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.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

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