Why are investors dumping Boeing stock?
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Yet as limited as the sources for modern jetliners are, demand for those commercial aircraft continues to soar. Airbus currently projects that more than 37,000 commercial jets will be bought between now and 2037. Boeing’s total market demand outlook is even more bullish – 42,700 jets worth about $15 trillion.
But if Boeing’s stock was worth $422.42 on March 8, why was it worth only $369.90 a share – 8.8 percent less - by Wednesday afternoon? And why is it still only worth $373.30 at market’s close on Thursday? Sunday’s crash notwithstanding, nothing has happened that justifies such a huge drop in the share price of the world’s largest maker of commercial aircraft.
The financial reality is that the explosion in global demand for air travel is very unlikely to be reduced even a tiny bit by the MAX aircraft crashes and groundings. And as long as demand for air travel remains robust, Boeing will continue to sell and deliver 800 or more planes a year, earning the company billions of dollars in profits annually.
Furthermore, even if airlines turn completely sour on the MAX versions of the 737 – the most popular jet airliner in history – they can’t very easily shift their business to Airbus, which already has a backlog of 7,390 planes on order. Boeing’s backlog totals nearly 5,900 planes, including about 4,700 orders for 737s.
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