While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of The Boeing Company (NYSE:BA) slipped about 1% in premarket trading Friday after Goldman Sachs downgraded the aerospace and defense giant from buy to neutral.
So what: Along with the downgrade, analyst Noah Poponak lowered his price target to $130 (from $150), representing about 5% worth of upside to yesterday's close. So while contrarians might attracted to the stock's weakness in recent months, Poponak's call suggests that much of Boeing's growth prospects are still baked well into the valuation.
Now what: According to Goldman, Boeing's risk to reward trade-off is pretty balanced at this point. "We believe investors in Aerospace should seek to obtain less exposure to Original Equipment and more exposure to aftermarket," Poponak said. "[T]he current cycle has now driven Boeing to produce 2X the amount of aircraft in did in 2008, making incremental growth in the medium-term difficult." When you couple those growth headwinds with Boeing's not-so-cheapish P/E of 20, it's tough to disagree with Goldman's cautious stance.
More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.