Boeing (BA) Stock Lower Today as Airbus Close to $13 Billion Delta Air Order

NEW YORK (TheStreet) -- Shares of Boeing Co. (BA) are down 0.42% to $131.06 in pre-market trade after it was reported that Airbus Group (EADSY)  is close to winning an order from Delta Air Lines (DAL)  for as many as 50 wide-body jets valued at about $13 billion, beating competing planes from Boeing, sources told Bloomberg.

The sale would be a mix of Airbus's A330neo and A350-900 planes, sources added. The purchase with Atlanta-based Delta is still being negotiated and may be announced as early as next week, a source said.

A deal would build on earlier Airbus successes at Delta, including a 40-plane order in 2013 with a list value of $5.6 billion. Delta had favored models from Chicago-based Boeing over Airbus until acquiring Northwest Airlines in 2008. Boeing supported Delta's bankruptcy restructuring plan in 2007 in the face of a hostile takeover bid by US Airways (LCC) , Bloomberg said.

TheStreet Ratings team rates BOEING CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOEING CO (BA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BA's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 7.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BOEING CO has improved earnings per share by 23.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BOEING CO increased its bottom line by earning $5.97 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($8.35 versus $5.97).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Aerospace & Defense industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $1,158.00 million to $1,362.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Aerospace & Defense industry and the overall market, BOEING CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • In its most recent trading session, BA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • You can view the full analysis from the report here: BA Ratings Report
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