Why The Boeing Company Might Pull Back

Before you go, we thought you'd like these...
Before you go close icon

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of The Boeing Company slipped nearly 3% today after Oppenheimer downgraded the aerospace and defense giant from outperform to perform.

So what: Along with the downgrade, analyst Yair Reiner removed his $140 price target, suggesting that he sees limited upside, and possibly even significant downside, from Boeing's current levels. While momentum traders might be attracted to the stock's steady climb in 2013, Reiner believes that Mr. Market might be underestimating some headwinds working against the company.

Now what: Oppenheimer sees Boeing's risk and reward trade-off as pretty balanced at this point. "While we still see Boeing's FCF improving over the next two years, we believe investors are overlooking how a convergence of factors are aligning to make 2015 a medium-term peak," noted Oppenheimer. "Yes, 787 investment should (should) top out in 2015, but the call on cash is likely to be quickly replaced by investments in the 737MAX and 777x." With Boeing shares still up about 90% from their 52-week lows, and trading at a 20-plus P/E, waiting for a wider margin of safety certainly seems prudent.

More dynamic income opportunities
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article Why The Boeing Company Might Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading