Portfolio Management
Before the opening bell on Monday, Goldman Sachs lowered its rating on aerospace-defense company Boeing (BA). Here’s what the news means for mutual fund investors.
Inside the Downgrade
Goldman Sachs has downgraded Boeing from “Neutral” to “Sell” citing lower aircraft demand, slower production rates, increased deferred production and less medium-term free cash flow.
The firm has a $132 price target on Boeing, suggesting a 15% decline.
Has Boeing’s Bull Run Come to a Halt?
Shares of Boeing have rallied about 150% over the last 5 years and about 20% in the last 12 months, but will the run continue? According to Goldman, this uptrend may be over as Boeing is expected to be faced with several challenges.
However, on Friday, Sterne Agee had a different view on Boeing, citing impressive free cash flow. The firm boosted its rating on BA to “Buy” with a $196 price target.
While there are mixed analyst views on the stock, this stock may be a good choice for long-term investors seeking a healthy dividend yield that has room to grow. In December, the company boosted its dividend by 25%.
Mutual Funds to Watch
Investors interested in BA may be also be interested in the funds listed below. These funds currently have the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 1.56% |
| VFINX | Vanguard 500 Index | 1.03% |
| PRGFX | T. Rowe Price Growth Stock | 0.71% |
The Bottom Line
The funds listed above allow investors to gain exposure to BA while remaining diversified. Investors interested in BA may also be interested in Lockheed Martin (LMT).
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