TLDR
- Boeing stock fell more than 2% Thursday morning on reports a new China jet order is unlikely.
- China now makes up just 2% of Boeing’s backlog, down from roughly 20% of deliveries between 2010 and 2019.
- Boeing is instead focused on finalizing its May agreement for 200 jets rather than chasing a larger new deal.
- The Trump-Xi summit is expected to center more on trade truce extensions, AI safeguards and Taiwan than aircraft orders.
- Wall Street still expects Boeing to deliver more than 800 planes in 2028, generating roughly $10 billion in free cash flow.
Boeing stock dropped more than 2% Thursday morning after reports suggested a summit between President Trump and President Xi Jinping was unlikely to produce a fresh Chinese jet order. Shares were down 2.3% at $195.07 as of Thursday morning.
The stock has had a rough stretch. Boeing was down about 8% year to date and off roughly 7% over the past 12 months heading into Thursday’s session.
Two people briefed on the matter told Reuters that negotiations remained fluid. Boeing is reportedly focused on finalizing its May agreement for 200 jets rather than pushing for hundreds of additional planes.
That May deal had been seen as a first step toward reopening China’s market to Boeing. The planemaker has been largely shut out of new Chinese orders since 2017.
Airbus, meanwhile, has expanded its footprint in the country during that stretch. China is expected to need around 9,000 new aircraft by 2045, according to forecasts from both planemakers.
Expectations for a bigger order had climbed earlier this year after officials from Boeing, China and the U.S. discussed a possible deal covering up to 500 aircraft. Boeing CEO Kelly Ortberg later called the 200-plane deal an initial tranche, but has since downplayed hopes for anything larger.
Why China Matters Less Than It Used To
China currently accounts for only about 2% of Boeing’s backlog of undelivered aircraft. That’s a steep drop from the 20% share of deliveries China represented between 2010 and 2019.
Order rates from Chinese airlines have picked up since the pandemic, but Airbus has captured most of that business. Boeing has been held back by trade tensions and lingering fallout from the 737 MAX crisis.
There are still some signs of movement on the existing deal. U.S. Trade Representative Jamieson Greer said this week that about 140 orders are in good shape, with another 10 being finalized.
One source told Reuters that details on part of the May agreement could still surface during the summit if contracts get completed in time. The U.S. and China have also agreed to extend their trade truce by two months past its November 10 expiry, according to Treasury Secretary Scott Bessent.
The Bigger Picture for Boeing Stock
China ranks well behind other issues on Boeing’s list of concerns right now. Production rates, plane certification and fuel costs matter more to the stock’s near-term path.
Wall Street expects Boeing to deliver more than 800 jets in 2028. That would translate into roughly $10 billion in free cash flow.
Boeing shipped over 800 planes back in 2018, the year before the second fatal 737 MAX crash, and hasn’t matched that since. Shares dipped recently after CEO Kelly Ortberg said 737 MAX production ramp-up was moving slowly at a September conference.
BofA analyst Ron Epstein called that dip an “overreaction to predictable headwinds.” He added that production challenges should be expected given the complexity of the turnaround.
Oil prices are another factor weighing on the stock. Boeing traded above $230 before the Iran war began, then fell below $190 in late March as oil prices spiked.
Boeing still needs to certify its 777X and 737 MAX-10 jets for commercial service. The company’s total backlog of unfilled orders sits at almost 6,800 planes. Boeing did not respond to a request for comment on the summit report.
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