In a surprising turn for Wall Street, Boeing's stock tumbled more than 4% on Thursday despite news of a significant aircraft order from China, prompting CNBC's Jim Cramer to call the dip a prime buying opportunity. The announcement, highlighted by President Donald Trump during an appearance on Fox News' "Hannity," revealed that China had agreed to purchase 200 Boeing jets from President Xi Jinping. Shares of the aerospace giant closed at $229.21, down 4.73% for the day, though they edged up 0.30% in after-hours trading.
Trump, speaking about his recent interactions with Chinese leadership, described the deal as a key outcome. "One thing he agreed to today, he’s going to order 200 jets … 200 big ones," Trump said on the program, referring to Xi. This marks Boeing's first major order from China since Trump's 2017 trip to Beijing, during which China committed to buying 300 Boeing aircraft as part of broader trade discussions.
The market's reaction stemmed from expectations that far exceeded the actual commitment. According to Bloomberg News reports from March, analysts had anticipated a package that could include as many as 500 Boeing 737 Max jets. Details of the new agreement remain scarce, with no immediate information available on delivery timelines or specific aircraft models, leaving investors to speculate on the deal's scope.
Jim Cramer, host of "Mad Money," quickly weighed in on the social media platform X, viewing the sell-off as undervaluing the company's potential. "Boeing is very good down ten," Cramer posted, alluding to the stock's roughly $10 to $11 decline following the news. His comment underscores a bullish sentiment among some investors who see the pullback as a temporary overreaction rather than a fundamental setback.
Boeing has been navigating a challenging recovery in recent years, marked by production issues, regulatory scrutiny, and the lingering effects of the 737 Max grounding. The company's stock has shown mixed performance metrics, placing it in the 65th percentile for quality according to Benzinga’s Edge Rankings, but only the 25th percentile for value. Despite these rankings, the stock exhibits favorable price trends across short, medium, and long terms, suggesting underlying momentum.
On a year-to-date basis, Boeing's shares are up 0.63%, a modest gain amid broader market volatility in the aerospace sector. The China order, while below hopes, represents a positive development in U.S.-China trade relations, which have been strained by tariffs and geopolitical tensions. Boeing, as one of America's largest exporters, stands to benefit from any thaw in these dynamics.
Industry observers note that China's aviation market continues to grow rapidly, driven by increasing domestic travel and fleet modernization needs. The 200-jet order, though smaller than anticipated, could signal the start of renewed procurement activity. However, without specifics on the types of aircraft—potentially including the 737 Max, which has faced certification hurdles in China— the full impact remains unclear.
Trump's announcement came amid ongoing efforts to highlight economic wins from his administration's diplomatic engagements. The 2017 Beijing deal, which included the 300-jet commitment, was part of a larger $250 billion trade agreement aimed at balancing U.S.-China commerce. That pact faced implementation challenges, but it provided a lifeline for Boeing during a period of domestic manufacturing woes.
Market analysts have varied takes on the stock's movement. While Cramer's optimism points to a buying chance, others caution that Boeing's broader challenges, including supply chain disruptions and labor disputes, could cap near-term gains. The company's recent percentile rankings reflect this duality: strong in quality assessments but lagging in perceived value, which may explain the sharp drop despite positive news.
Looking back, Boeing's stock has endured significant fluctuations. The 737 Max crises in 2018 and 2019 led to a prolonged downturn, with shares plummeting over 50% at one point. Recovery efforts have included workforce reductions and production ramp-ups, but investor confidence has been slow to rebuild. The China order fits into this narrative as a potential catalyst, albeit one that fell short of sparking a rally.
Broader implications for the aerospace industry could ripple from this deal. Competitors like Airbus, which has gained ground in China during Boeing's troubles, may face renewed pressure if Boeing regains market share. U.S. trade officials have emphasized the importance of such orders in maintaining American manufacturing jobs, with Boeing employing tens of thousands across the country.
As details emerge, Wall Street will scrutinize the agreement's fine print. Delivery schedules, financing terms, and integration with China's existing fleet will determine its long-term value. For now, the stock's after-hours rebound hints at cautious optimism, aligning with Cramer's view that the dip presents value for long-term investors.
Boeing executives have not yet commented publicly on the order, but sources close to the company suggest it aligns with ongoing discussions in international sales. The deal's timing, coinciding with Trump's media appearances, adds a layer of political context to what is fundamentally a commercial transaction. Analysts predict that if followed by larger commitments, it could bolster Boeing's position in the global market.
In the end, Thursday's events highlight the interplay between geopolitics, corporate performance, and investor sentiment. While the 200-jet order didn't meet lofty expectations, it serves as a reminder of Boeing's enduring role in U.S. exports. As the company pushes forward with its recovery, eyes will be on future announcements that could drive sustained growth.