RBC Capital Markets initiated coverage of Boeing shares at an underperform rating because of the prospect of declining profit margins in its commercial airplane business and the risk of President-elect Donald Trump’s trade policy agenda.
“We have found a strong correlation between Boeing’s commercial operating margins and the average age of Boeing’s platforms. … We see signs that this is already starting to drive commercial margin pressure,” analyst Matthew McConnell wrote in a note to clients Wednesday.
“It is unclear how President Trump will differ from ‘candidate Trump,’ but following through on the protectionist policies that were central to his campaign could be a headwind to the commercial aerospace sector,” he added.
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