Boeing (BA) Stock Slides 2% as Trump-Xi Meeting Dims Hopes for Major China Aircraft Deal

TLDR

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Boeing shares declined over 2% Thursday following reports that a significant Chinese aircraft order is improbable.
Chinese business now represents merely 2% of Boeing’s order backlog, a dramatic decline from approximately 20% of deliveries during 2010-2019.
The aerospace giant is concentrating on completing its May arrangement for 200 aircraft instead of pursuing a more substantial new agreement.
The upcoming Trump-Xi meeting is anticipated to prioritize trade truce extensions, artificial intelligence protocols, and Taiwan relations over plane purchases.
Analysts project Boeing will ship over 800 aircraft by 2028, potentially producing approximately $10 billion in free cash flow.

Boeing shares tumbled more than 2% during Thursday’s morning trading session following reports indicating that the anticipated summit between President Trump and Chinese President Xi Jinping would likely not result in a new Chinese aircraft purchase. The stock traded down 2.3% at $195.07 during Thursday morning hours.

The Boeing Company, BA

The aerospace manufacturer has experienced a challenging period recently. Boeing stock was trading approximately 8% lower year to date and had declined roughly 7% over the previous 12-month period entering Thursday’s trading.

According to two individuals familiar with the discussions who spoke to Reuters, negotiations continue to evolve. Boeing is apparently concentrating on completing its May arrangement covering 200 aircraft rather than seeking hundreds of additional planes.

That May arrangement had been interpreted as an initial step toward reestablishing Boeing’s presence in China’s aviation market. The aircraft manufacturer has been essentially excluded from new Chinese purchases since 2017.

During this period, Airbus has significantly strengthened its position in the Chinese market. Industry projections from both aircraft manufacturers suggest China will require approximately 9,000 new planes by 2045.

Anticipation for a more substantial order had increased earlier this year following discussions between Boeing representatives, Chinese officials, and U.S. authorities regarding a potential agreement encompassing up to 500 aircraft. Boeing CEO Kelly Ortberg subsequently characterized the 200-plane arrangement as an opening installment, though he has recently tempered expectations for anything more substantial.

China’s Diminished Role in Boeing’s Portfolio

The Chinese market presently comprises only approximately 2% of Boeing’s backlog of outstanding aircraft orders. This represents a dramatic reduction from the 20% portion of deliveries that China constituted during the 2010-2019 period.

Chinese airlines have increased their ordering activity since the pandemic’s conclusion, though Airbus has secured the majority of this business. Boeing has faced obstacles due to trade disputes and continuing repercussions from the 737 MAX crisis.

Some progress indicators regarding the current agreement remain visible. U.S. Trade Representative Jamieson Greer stated this week that approximately 140 orders are progressing well, with an additional 10 nearing completion.

One source informed Reuters that specifics regarding portions of the May agreement might still emerge during the summit if contracts are finalized punctually. The United States and China have additionally agreed to extend their trade truce by two months beyond its November 10 expiration, according to Treasury Secretary Scott Bessent.

Boeing Stock’s Broader Outlook

China currently sits well below other priorities on Boeing’s agenda. Manufacturing rates, aircraft certification processes, and fuel expenses carry greater significance for the stock’s immediate trajectory.

Wall Street analysts anticipate Boeing will deliver more than 800 aircraft in 2028. Such performance would generate approximately $10 billion in free cash flow.

Boeing delivered over 800 planes in 2018, the year preceding the second fatal 737 MAX accident, and has not achieved that level since. Shares declined recently after CEO Kelly Ortberg indicated at a September conference that 737 MAX production acceleration was progressing slowly.

BofA analyst Ron Epstein characterized that decline as an “overreaction to predictable headwinds.” He noted that manufacturing challenges should be anticipated given the turnaround’s complexity.

Petroleum prices represent another element affecting the stock. Boeing traded above $230 prior to the Iran conflict’s escalation, then dropped below $190 in late March as crude oil prices surged.

Boeing still requires certification for its 777X and 737 MAX-10 aircraft for commercial operations. The company’s complete backlog of outstanding orders stands at nearly 6,800 planes. Boeing did not provide a response to a comment request regarding the summit report.

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