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Boeing Still Looks Pricey

Boeing Still Looks Pricey
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Boeing Co

Chris Higgins: Boeing stock fell over 5% on the back of news the Trump administration may enact tariffs against China. Boeing has significant exposure to the Chinese market. Last year, it exported 202 jets to China, representing 25% of its deliveries.

We think that Chinese aircraft represent about 10% of Boeing's consolidated operating profits. However, we don't see China putting tariffs on jets immediately unless a trade war really starts heating up. China needs Boeing's jets to fuel air traffic demand in its domestic market and internationally, and we don't think Airbus nor domestic supplier Comac can provide enough jets to satiate this demand.

We've seen Boeing shares overvalued for some time now, and we're not changing our fair value estimate in response to these announced tariffs.

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About the Author

Chris Higgins

Senior Equity Analyst
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Chris Higgins, CFA, is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers aerospace and defense companies, airports, and airlines.

Before joining Morningstar in 2015, Higgins spent eight years working for Airbus Group in both the United States and Europe. While at Airbus Group, he held a variety of positions, ranging from corporate development to investor relations.

Higgins began career in strategy consulting, where he consulted leading U.S. and European aerospace and defense prime contractors. During his time in consulting, he led teams that solved business challenges ranging from merger and acquisition decisions to new product launches.

Higgins holds a bachelor’s degree in economics from Rhodes College, where he graduated as a member of Phi Beta Kappa, and a master’s degree in finance from The Henley Business School in the United Kingdom. He also holds the Chartered Financial Analyst® designation.

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