Boeing Faces Major Challenges Amid Significant Stock Decline
Arlington, Virginia-based The Boeing Company (BA) designs, develops, manufactures, sells, and services commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems. With a market cap of $95.9 billion, Boeing operates across the Americas, Indo-Pacific, Europe, and around the globe.
Boeing Struggles in a Favorable Market
The aerospace and defense giant has significantly lagged behind the broader market over the past year. Boeing’s stock has fallen 40.5% in 2024 alone and 20.5% over the last 52 weeks. In contrast, the S&P 500 Index ($SPX) has risen by 19.8% year-to-date and 31.1% over the previous year.
Comparison with Aerospace & Defense Sector
More specifically, Boeing has also underperformed relative to the SPDR S&P Aerospace & Defense ETF (XAR), which gained 14.7% year-to-date and 28.2% over the past year.
Reputation Impacted by Recent Incidents
Boeing’s passenger aircraft have experienced serious technical issues, contributing to tragic accidents. In July, the company admitted to defrauding the Federal Aviation Administration, which severely damaged its reputation. Moody’s Corporation (MCO) and S&P Global Inc. (SPGI) downgraded Boeing’s bonds, leading to increased financing costs for the company. This series of events has severely eroded shareholder wealth and trust.
Third Quarter Earnings and Future Predictions
Following the release of its Q3 earnings on October 23, Boeing’s shares dropped 1.8%, continuing a downward trend for the next three trading sessions. The company’s financial results suffered due to a work stoppage by the International Association of Machinists and Aerospace Workers (IAM) and various charges on commercial and defense projects. Revenues fell 1.5% year-over-year to $17.8 billion. Furthermore, the non-GAAP net loss per share deepened from $3.26 in the same quarter last year to $10.44, missing Wall Street’s expectations.
Analysts forecast an adjusted net loss of $16.09 per share for the current fiscal year ending in December, representing a decline of 176.9% from last year’s loss of $5.81. Boeing’s recent earnings surprise history is mixed; it has missed Wall Street’s estimates in two of the past four quarters.
Analyst Ratings and Price Targets
Boeing’s stock carries a consensus “Moderate Buy” rating. Among 24 analysts tracking the stock, 14 recommend a “Strong Buy,” one advises a “Moderate Buy,” seven suggest a “Hold,” and two give a “Strong Sell” rating.
This outlook is somewhat less optimistic than a month ago, when 16 analysts were recommending a “Strong Buy.” On November 4, Wells Fargo & Company (WFC) analyst Matthew Akers maintained a “Sell” rating and decreased the price target to $85.
The average price target stands at $189.50, which suggests a potential increase of 22.2% from current levels. Notably, the highest target of $250 indicates a possible upside of 61.2%.
More Stock Market News from Barchart.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
