Lost deal jars Boeing stock

By BRYAN CORLISS

Herald Writer

Boeing stock nose-dived Monday, caught in the jetwash from Friday’s announcement that it had lost a key contract to rival Airbus Industrie and buffeted by profit-taking.

The stock dropped more than $6 a share to close at $58.50, a loss of not quite 10 percent of its value, a little more than a week after it had soared to an all-time high.

The drop started after an analyst at Lehman Brothers downgraded his rating on the stock to "neutral."

The analyst, Joseph Campbell Jr., told CBS MarketWatch that he was concerned about the future of Boeing’s 747 following Friday’s decision by Singapore Airlines to buy Airbus’ new A3XX superjumbo jetliner instead of Boeing’s proposed 747X Stretch jet.

However, Campbell also said he was surprised by the market’s reaction to the news, and speculated that most of those who sold shares Monday were investors who had decided to cash in on the big gains they’d seen during the stock’s recent run-up.

Other stock analysts remain high on Boeing. Morgan Stanley Dean Witter on Monday reiterated its "strong buy" recommendation on the stock and predicted a target price of $74 a share.

And Seattle-based analyst Robert Toomey of Dain Rauscher Wessells issued a report Monday repeating his "strong buy" recommendation and raising his long-term target price to $80 a share. A short-term dip is likely, Toomey said, and investors should consider buying while shares are in the $55 to $58 range.

Boeing had some good news to take the edge off the Airbus loss.

On Monday, American Airlines exercised an option to buy six more Boeing jets — four 737-800s and two longer-range versions of the 777-200, built in Everett. The list price on the six planes would be up to $560 million, depending on options.

On Monday, Boeing also confirmed that GE Capital Aviation Services had completed a previously announced deal for 74 planes, with a combined list price of $5.5 billion. Of those, 15 will be 777s of one kind or another.