Threats of a U.S./China trade war and tariffs on steel and aluminum are weighing heavily on Boeing Co (NYSE:BA). In fact, BA stock is down more than 13% since hitting an all-time high in late February. That said, the defense sector remains strong, as does consumer discretionary spending. Both of these factors make Boeing stock a buy heading into this month’s earnings report.

Current Outlook for BA Stock

Drilling down on Boeing’s fundamentals, analysts are looking for a profit of $2.56 per share in the first quarter. In the same period last year, Boeing earned $2.01 per share. As for revenue, the consensus is targeting sales growth of about 4.2% to $21.85 billion, which is tracking better than full-year growth targets of just 4%.

That said, the recent flap over tariffs created a bit of trepidation in the brokerage community. Specifically, Thomson/First Call reports that BA stock has garnered 14 buys and 11 hold ratings. The 12-month consensus price target rests at $386.83 — a roughly 20% premium to BA’s current price.

Technically, BA stock has pulled back to key support in the $320 region following the recent market volatility. The shares rebounded off this support on Thursday last week, but broad-market weakness is once again threatening today. That said, I would expect this area to hold, barring any other major downturns in the broader market. Should $320 fall, the next level of support lies at $310, with a solid floor at $300.

Turning to Boeing’s options backdrop, speculators are quite bearish on BA’s post-earnings prospects. Currently, the May put/call open interest ratio arrives at 1.22, with puts firmly in command of the post-earnings backdrop. That said, peak put OI rests at the in-the-money $340 strike, indicating that bearish expectations may already be priced into the shares.

As for implied volatility, May options are pricing a potential post earnings move of about 10% for BA stock. This places the upper bound near $362, while the lower bound rests near $300.

2 Trades for BA Stock

Call Spread: Boeing remains in solid shape fundamentally and technically. As such, this dip amid broad market volatility should be a buying opportunity. Traders looking to capitalize on a potential post-earnings rally might want to consider a May $330/$335 bull call spread.

At last check, this trade was offered at $2.02 cents, or $202 per pair of contracts.  Breakeven lies at $332.02, while a maximum profit of $2.98, or $298 per pair of contracts, is possible if BA stock closes at or above $335 when May options expire.

Put Spread: On the other hand, if Boeing indicates some impact from the tariffs, or if the broader market remains volatile, the shares could continue to weaken. As such, traders looking to side with the bears ahead of Boeing’s earnings might want to consider a May $315/$320 bear put spread.

At last check, this spread was offered at $1.26, or $129 per pair of contracts.  Breakeven lies at $318.74, while a maximum profit of $3.74, or $274 per pair of contracts, is possible if BA closes at or below $315 when May options expire.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.