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What's Next For Boeing, The Dow's Biggest Winner Of 2017?

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What's Next For Boeing, The Dow's Biggest Winner Of 2017?

The top performing stock within the Dow Jones Industrial Average is none other than Boeing Co (NYSE: BA). Shares of the aerospace company hit a new all-time high of $208.61 Wednesday morning and the stock is up more than 33 percent since January 1 versus about 8.5 percent for the overall index.

This doesn't mean it's a good move for investors to lock in a profit, at least according to Ken Herbert, an analyst with Canaccord Genuity who covers Boeing with a Hold rating and $170 price target.

At current levels, Boeing's stock delivers a dividend yield of around 3 percent and is well positioned to benefit from an improving economy and favorable defense spending from the White House, the analyst said during a recent CNBC "Trading Nation" segment. On the other hand, investors have reason to be concerned with a lack of free cash flow to the upside.

Investors would be wise not to chase Boeing's stock at these levels, but those who already hold the stock should continue to do so as the dividend and current cash flow alone provide a "nice floor on the stock."

Any Options Play?

Dennis Davitt of Harvest Volatility Management was also a guest on the segment to offer his take on what the options market is saying about the Dow's top stock.

Unfortunately for investors, the options market is a "very expensive" way to gain exposure to Boeing's stock, Davitt said. But the expensive nature of the options is justifiable because there's a lot of demand for a "great stock" like Boeing along with the necessary insurance to protect investors from any downside.

"The options market is saying it's a great stock, hold onto it, but buy some insurance on it — and a lot of people seem to be doing that," Davitt emphasized.

Related Links:

A Preview Of Boeing's Q2 Earnings Results

Boeing Announces Biggest Jet Yet At Paris Air Show

Posted-In: aerospace Canaccord Genuity CNBCAnalyst Color Options Markets Media Trading Ideas Best of Benzinga

 

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