Boeing Still Looks Pricey

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.