Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Stay Tuned: Boeing vs. Northrop

Whether you knew it or not, today is the day you've been waiting for. At least, it is if you own shares of either Boeing (NYSE: BA  ) or Northrop Grumman (NYSE: NOC  ) -- the two key contenders in the contest to win a potential $40 billion contract to build the "KC-X Tanker" for the U.S. Air Force. Citing an Air Force source, Reuters has just confirmed that the award will be announced at 5 p.m. today.

What's it mean to you?
Expect a sharp reaction to the share price of whichever firm loses the contract, and likely a happier reaction from the winner. And more muted reactions among the firms' team members -- EADS and GE (NYSE: GE  ) sided with Northrop; Rockwell Collins (NYSE: COL  ) and United Technologies (NYSE: UTX  ) joined Boeing; while Honeywell (NYSE: HON  ) is on both teams. If you're in the mood to try to take advantage of an overreaction by Mr. Market, consider this: Estimated at $30 billion to $40 billion in value over the next 10 to 15 years, the KC-X contract represents about 10% in extra annual revenue to Northrop, but its effect -- win or lose -- will be only half as great on Boeing's fortunes.

My feeling is that anything more than a 5% drop in share price for Boeing, if it loses, would be an overreaction worthy of a buy order. Conversely, any more than a 10% spike at Northrop would be too much to pay. Trade accordingly.

Read these quick before the announcement:

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 588817, ~/Articles/ArticleHandler.aspx, 10/23/2016 7:50:38 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:03 PM
BA $135.63 Down -0.21 -0.15%
Boeing CAPS Rating: ****
NOC $215.86 Down -1.50 -0.69%
Northrop Grumman CAPS Rating: ****
COL $84.46 Up +0.83 +0.99%
Rockwell Collins CAPS Rating: ****
GE $28.98 Down -0.09 -0.31%
General Electric CAPS Rating: ****
HON $108.96 Up +0.82 +0.76%
Honeywell Internat… CAPS Rating: ****
UTX $98.67 Down -0.62 -0.62%
United Technologie… CAPS Rating: ****