Current State of Boeing Stock
Boeing, known as one of the leading jet producers globally, is facing turbulences following multiple incidents involving its 737 Max fleet – a fleet that had been previously grounded due to fatal crashes. The recent blowout of a panel on one of its jets mid-flight sparked concerns, leading to a criminal probe by the Department of Justice. As a result, the stock has plummeted, making it one of the worst performers in the S&P 500 Index, down by over 31% in 2024.
With a current valuation of 1.25x forward sales, a discount compared to sector averages, BA might seem like a bargain – but caution is advised given the underlying challenges the company is facing.
Political Exodus from Boeing Stock
In the midst of the DOJ investigation, members of Congress from both parties have been offloading their Boeing holdings. From Rep. Blake Moore to Rep. Bill Keating, politicians are divesting, mirroring the broader sentiment of uncertainty surrounding Boeing’s future.
Financial Struggles at Boeing
Alongside safety concerns, Boeing’s profitability remains a point of contention. The company has seen significant revenue declines over the years and has only reported profits in one of the past 16 quarters. While Q4 of fiscal 2023 outperformed expectations, challenges still loom large.
Despite the rocky financials, Boeing’s free cash flow outlook appears promising, aiming for a significant increase by 2025-26, even as CEO Dave Calhoun emphasizes quality over financial forecasts for the immediate future.
Analysts’ Take on BA Stock
While concerns abound, analysts haven’t abandoned Boeing just yet. With a duopoly in the large aircraft market alongside Airbus, Boeing still holds a vital position. The consensus rating stands at a “Moderate Buy,” with analysts cautiously optimistic about the future, including Goldman Sachs, which upped its price target to imply almost 50% upside potential.
With a backdrop of challenging circumstances and political divestitures, the question remains – is Boeing a sturdy ship to weather the storm, or is it time for investors to seek safer harbors?
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are 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.
