Boeing downgrades
Boeing Co. shares fell by 1.37% to close at $339 this evening. The firm is hit with scrutiny about the cover-up of the Boeing 737 Max crisis, and analysts have been downgrading the stock left, right, and centre.
The price to earnings ration on average for the S&P is 17x, while Boeing trades at 20x multiple. It’s interesting because the aerospace and defence sector has collectively outperformed the S&P this year, as the iShares US Aerospace and Defense ETF has gained 24.2% while Boeing has only inched about 2.7% higher since the beginning of the year.
Unusual options activity is great indicator of the kinds of the bets that traders are making on the stock, and there’s some unusual activity for puts with the $300 stock price as traders feel the stock is about to slide further.
With latest reports revealing that Boeing staff and pilots knew of the flaws in the 737 Max, it seems to me that there could be a lot more going on that Boeing is letting the public know. As much as the firm would like to “control the narrative”, I think its time to let the full story out instead of strategically delaying the release of information. Makes me wonder about how much there is that the firm hasn’t let the public know.
PG&E troubles
Shares slid over 30.56%, closing at $5.00, and PG&E’s troubles seem to have only begun. Power lines installed by the company broke right before the wildfire broke out in California’s wine country. Installed systems continue to pose a threat to the safety of residents, despite measures taken to reduce the threat of fire by the firm.
The firm is already in deep waters as it sought for $30 billion in bankruptcy protection for fire-related liabilities in January.
PG&E Chief Executive Bill Johnson said Thursday that the company would continue to investigate the circumstances behind the line’s failure and whether it started the Kincade Fire. By today morning, the fire has burned 21,900 acres.
Intel earnings
Stock for chip-making giant gained as much as 8% today, closing at $56.46 after major earnings beat this evening. Intel beat third-quarter expectations and reignited revenue growth. The firm reported earnings of $1.42 per share vs consensus estimates of $1.24 per share. Reported revenue was $19.19 billion compared to estimates of $18.05 billion.
The surprising increase in revenue can be attributed to the increase in data centre revenue. Despite the shrinking PC market in the last few years, the firm’s chip earnings have continued to be a major source of revenue for Intel. The firm seems to have survived shaky winds in the midst of a trade war
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