Boeing Co (NYSE:BA) and Trade Concerns

Boeing Co has faced losses since the election, failing to capitalize on the market surge. Jefferies highlights fears of the company's involvement in a potential US-China trade war under a second Trump administration as a significant factor affecting the stock.

Stock Performance

• BA shares are down 10% since the election, whereas the S&P is up 4%, indicating renewed concerns about US-China trade relations.

Jefferies believes these concerns may be exaggerated as China accounts for just 2% of Boeing's backlog, or 13% when including unidentified orders. This is a decrease from 23% of deliveries from 2012 to 2018.

Market Conditions

Despite the challenges, the supply and demand landscape remains positive, suggesting opportunities for Boeing in China.

• Challenges for China: Limited domestic production capabilities from the Commercial Aircraft Corporation of China (COMAC), which aims to compete with Boeing and Airbus.

Investor Worries

Investors are concerned about Trump's proposed 10-20% border tariffs and 60% tariffs on Chinese goods, which could reignite the trade war and impact Boeing.

Outlook

Jefferies maintains a positive outlook for Boeing, citing limited domestic production options in China and the ongoing demand for aircraft to support growth in the region.