J.P. Morgan downgraded Boeing (BA ) to underweight from neutral.
Analyst Joe Nadol says Boeing's commercial aircraft unit is highly dependent on deliveries to Asian carriers. Given the devastating impact that SARS is having on those carriers, he's become increasingly concerned that scheduled deliveries could be at risk.
Also, Nadol thinks investors aren't fully accounting for a large pension plan deficit in terms of its impact on valuation and free cash flow on the stock. Even excluding SARS, he thinks Boeing's 2004 commercial guidance still reflects a best-case scenario.
He cut the $2.00 2004 earnings per share estimate to $1.75. He thinks these issues brings to light much of the downside risk.