Buy any Boeing pullback in first earnings since 737 Max crisis, market watcher says – CNBC







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Wall Street is about to get its first glimpse at how Boeing has weathered its 737 Max crisis.

Its earnings report, out before the bell Wednesday, is the first since the company was forced to ground its 737 Max fleet in mid-March following two fatal plane crashes within six months. Its shares remain 16% below a record set on March 1.

Mark Tepper, president of Strategic Wealth Partners, says any near-term weakness should be overlooked in favor of future strength.

“We invest in companies that have a good strong growth story that are reasonably priced, and Boeing definitely fits that criteria as a long-term play,” Tepper said on CNBC’s “Trading Nation” on Tuesday. “This is a stock we want to hold. We love their business mix — over 20% is defense. They’re in a dominant position. We don’t think the airlines are going to switch to Airbus, so we’d be buyers on a pullback.”

At its worst during the March sell-offs, Boeing shares fell as low as $361.53, gapping 19% from its 52-week high. Since then, it has recouped 3%.

This earnings report could put some pressure on the stock, though, adds Tepper.

“All eyes are going to be on their cash flow burn associated with the 737 Max, and what I think it’s important for investors to understand is this is just a timing event. The cash flow is still going to be realized. It’s just going to be pushed back,” he said.

Free cash flow is expected to have fallen 52% year over year in its March-ended quarter, according to analysts surveyed by FactSet. Quarterly free cash flow for the three months to June is estimated to fall 96%.

Fairlead Strategies founder Katie Stockton says Boeing shares need to hold one key level following this earnings report.

“The chart is in a long-term uptrend for sure, but more recently you’ve seen some consolidation within that uptrend above the rising 200-day moving average,” Stockton said Tuesday on “Trading Nation.” “So I think with Boeing into earnings we really need to be watching support at that 200-day moving average.”

Boeing would need to fall 3% before touching its 200-day moving average. Stockton adds that a break above its 50-day moving average would be bullish, a level still a 9% rally from its current price.

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About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network’s Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC’s Business Day programming, with a regular appearance on CNBC’s Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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