This Just In: Upgrades and Downgrades

At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In" we don't tell you only what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and worst and sorriest, too.

And speaking of the best ...
It's official. You can own Boeing (NYSE:BA) again. On Monday, for the first time since removing its "outperform" rating on the stock back in January, megabanker Wachovia is prepared to call the stock a buy (actually, an "outperform").

Now, I know what you're thinking. "Gee, thanks, Wachovia!" Thanks for warning us to get out of this stock in time to avoid ... its 7% rise in price since Wachovia's January downgrade. We're much happier with the 1% loss we got from our S&P 500-tracking mutual funds. Not.

It's a shame, really, both for investors who heeded Wachovia's advice to ditch their Boeing shares and for Wachovia itself. A correct call on Boeing back in January would have given Wachovia the boost it needed to get over the 50/50 accuracy bar, scored it a few CAPS points, and helped to offset goofs such as:

Yet even with the bad call on Boeing holding it back, Wachovia retains a rank among the top 20% of CAPS investors, and (at the risk of damning with faint praise) is just one pick shy of being as accurate as a flipped coin, having made correct calls on:

Will Boeing fly right?
But here's weird thing. Although Wachovia "called the top" on Boeing too early, its rationale for telling investors to exit the stock was sound. In January, Wachovia gave two reasons why investors should take some winnings off the table:

• Building airplanes is a cyclical industry. With plenty of good news already baked into Boeing's stock price, Wachovia saw little upside left.
• Citing sources "deep within Boeing's supply chain," Wachovia warned there could be delays in bringing Boeing's new 787 to market.

And how did things play out? Boeing's 7% gain since January beats the S&P's 1% loss, but single-digit profits probably do fit the definition of "little upside." Furthermore, last month, Boeing announced a six-month delay in bringing the 787 to market. Just as Wachovia predicted.

So when Wachovia said today it's safe to re-enter the aircraft, I'm listening. The analyst isn't contradicting its earlier rationale -- just expanding on it. While Wachovia sees a real risk of economic slowdown in the U.S., it believes that growth elsewhere around the globe will keep demand for Boeing's planes strong. Throw in the fact that dollar devaluation is making Boeing's planes cheaper, even as it inflates the sticker price on archrival Airbus' wares (a fact that Airbus confirmed just this weekend), and Boeing's sales could positively soar.

Put it all together, and Wachovia has a firm foundation for saying Boeing is now cleared for takeoff.