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2週前
Don't Expect Boeing (NYSE:BA) Stock to Bounce Back in March
By: Schaeffer's Investment Research | February 28, 2025
• Boeing has finished March lower in seven of the past 10 years
• An unwinding of optimism could pressure BA lower
It's no secret that Boeing Co (NYSE:BA) has struggled over the past year due to incidents with its commercial and defense units, as well as a workers' strike. While the stock saw a brief rally after the company's most recent quarterly report, investors should not bet on a recovery just yet, as it appeared on a list of 25 worst S&P 500 Index (SPX) names to own in March.
According Schaeffer’s Senior Quantitative Analyst Rocky White, BA averaged a 5% loss in March over the last decade, settling higher only three times during that period. The stock was last seen up 1.3% to trade at $175.27, indicating a drop of similar magnitude would place it closer to the $166 level.
Boeing stock carries a 15.2% year-over-year deficit, and has struggled to close above the $188 level despite several attempts since January. The security is today pacing for its fifth-straight close below the 20-day moving average, a trendline that has alternated between support and resistance for the past 12 months.
Options bulls aren't deterred by Boeing's recent woes, however. This is per BA's 50-day call/put volume ratio of 2.14 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 98% of annual readings. An unwinding of this optimism could fuel additional headwinds.
Meanwhile, short sellers are firmly in control, despite short interest falling 16.6% in the last two reporting periods. The 19.18 million shares sold short now make up a massive 214.7% of the stock's available float.
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1月前
Boeing (NYSE:BA) Stock Surges Despite Dismal Quarterly Results
By: Schaeffer's Investment Research | January 28, 2025
• The company also reported its biggest annual loss since 2020
• Boeing plans to hike production and deliveries of its 737 aircraft
Boeing Co (NYSE:BA) stock is on the rise after the company's recovery plan, despite steeper-than-expected losses for the fourth quarter, a revenue miss, and its biggest annual loss since 2020. The company noted incidents with its commercial and defense units, as well as last year's workers' strike, but has plans to gradually increase production and deliveries of its 737 aircraft. The aerospace giant also confirmed it is working to speed up the delivery of two Air Force One aircrafts.
BA is up 4.3% to trade at $182.74 at last glance, eyeing its biggest single-day percentage gain in over a year as it chips away at its 10.5% year-over-year deficit. The stock, which is among Schaffer's top picks for 2025, surged to its highest level since August right out of the gate, and earlier this month staged bounced off its ascending 40-day moving average.
Options traders have been more bullish than usual over the past 10 weeks. This is per BA's 50-day call/put volume ratio of 1.80 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 80th percentile of its annual range, showcasing a consistent preference for calls over puts.
Drilling down to today's options activity, 59,000 calls and 27,000 puts have already been traded, which is five times the intraday average volume. The most popular contract is the weekly 1/31 185-strike call, where positions are being opened.
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2月前
Boeing Under Pressure: Activists And Warren Buffett Circle
By: Forbes | January 19, 2025
Considered the pillar of the worldwide aerospace industry, Boeing has long related to aviation creativity and capability. But the giant is now negotiating difficult skies under the weight of many financial pressures, strict regulatory monitoring, and constant market dynamics. Recent events have complicated the story; activist investors show a strong interest in the business, and reports of Warren Buffett may be looking at a position. With major ramifications for Boeing's own future as well as for its shareholders and the larger aerospace sector, this confluence of high-profile attention will demand a turning point for the company. The rumor is that activist investors and the great Warren Buffet are circling the company.
Boeing’s Pressure With The Current Situation
Boeing's performance and reputation in the aerospace sector have been greatly affected by several financial and operational difficulties. The firm has struggled with technical problems and manufacturing delays across numerous aircraft models, including the well-publicized grounding of the 737 MAX following two catastrophic accidents. Along with immediate financial losses, these events have tarnished the company's manufacturer credibility and dependability.
Furthermore, complicating Boeing's condition are changes in the world economy brought about by the COVID-19 epidemic. The sharp decline in air travel lowered demand for new aircraft, which resulted in cancellations and deferrals of orders, thereby lowering Boeing's cash flow and income.
Boeing's stock price has clearly suffered in response to these difficulties; it has also shown great volatility. The company's market posture has also been under jeopardy as rivals like Airbus use Boeing's failures to seize more market share. These problems taken together call for a strategic overhaul to rebuild investor and consumer confidence, therefore ensuring Boeing's long-term viability and success in a fast-changing global market.
Activist Investors
Shareholders using their ownership interests in a firm to affect its strategic orientation and management are known as activist investors. Unlike passive investors, activists try to transform the businesses they fund to raise shareholder value in different ways. Their approaches might be pressing for a company to be sold, supporting management changes, restructuring of business operations, corporate policy influence, or financial strategy optimization.
Usually aiming for businesses, they feel underpriced or underperforming in relation to their natural potential. These investors Once active, they often interact with management to argue for measures they think would increase shareholder returns and profitability. Should cooperative negotiations fail, activists could intensify their efforts by asking other shareholders for support, starting public campaigns, suggesting new board members, or, in extreme circumstances, advocating a sale of the firm or its principal assets.
Big companies also frequently find themselves under fire. For instance, Elliott Management's engagement with AT&T resulted in notable changes in the company's approach, including divestments and a more focused attention on basic operations. Similarly, by effectively advocating strategic changes and operational improvements that finally raised Yahoo's market value, Starboard Value was instrumental in rejuvenating the company.
Warren Buffett's possible participation in a corporation like Boeing coupled with possible activist investors might point to a strong convergence of interests meant to propel major reforms. Although Buffett usually chooses businesses with great inherent value and consistent cash flows, the chance to release value through strategic changes and operational enhancements may attract activist investors. Aiming to improve Boeing's market position and operational efficiency, their combined presence can indicate to the market that significant changes may be on the horizon, maybe incorporating both governance reforms and strategy realignment.
Warren Buffett’s Investment Style
Warren Buffett is well known for stressing buying stocks of businesses at prices less than their inherent value, and Boeing is one of those names. Buffett emphasizes businesses with reasonable business concepts, good long-term prospects, consistent earnings power, and capable management. Often driving Buffett to invest in businesses whose stocks are momentarily undervalued by the market, this rigorous approach stresses long-term growth and stability over short-term rewards, but should this be adjusted in the current environment?
Buffett's passion for reputable industrial businesses with a strong competitive advantage, that is, what he describes as a "moat," is well known. Major names in sectors including insurance, energy, and consumer goods abound in his portfolio, where steady returns are usual. Given this backdrop, Boeing might fit Buffett's investing standards. Boeing is still a major participant in the aerospace business, a vital sector with great entrance barriers that can provide long-term competitive benefits despite its recent problems.
Boeing's current value, despite several challenges such as production issues and safety concerns, presents a potential turnaround opportunity that aligns with Buffett's strategy of acquiring robust companies during periods of economic downturn. He might very well be interested if he believes the market has unfairly punished the stock and that Boeing's basic business is strong with an obvious road for recovery. This potential investment aligns with Buffett's history of acquiring top companies at a significant discount, leveraging brief losses in large corporations.
Potential Scenarios For Boeing
Prominent figures like Buffett and activist investors circling Boeing could foreshadow major changes for the aircraft giant. To increase profitability and shareholder returns, activists can support broad reforms like leadership rotations, strategic pivots, or thorough financial restructuring. Those seeking a more concentrated and maybe more profitable company model may also find resonance in their advocacy of the separation of Boeing's several divisions to release hidden value. Often preferred in complicated conglomerates, this kind of split could comprise separating the commercial aviation sector from defense, space, and security departments, therefore enabling each company to maximize its operations and market strategy more precisely.
Should Buffett make his Boeing investment, his strategy might be somewhat different from that of other activist investors. Buffett, known for helping capable current management teams and allowing them freedom to run, may instead affect the strategic orientation of the business with his proven long-term value generation approach. He could advocate for improved capital allocation matching Boeing's core aircraft production strengths or for a streamlining of processes.
These possible approaches used together might transform Boeing into a more simplified and strategically focused company, thereby enhancing its appeal to investors and so confirming its position in both commercial and military aerospace sectors. Aiming to maximize shareholder value in the next few years, the mix of focused activist efforts and Buffett's influence on management and strategic decisions could signal a turning point in Boeing's history.
Implications For Boeing, Buffett And The Activists
The engagement of activist investors and possible interest from Warren Buffett in Boeing might create conditions for significant internal corporate transformation as well as knock-on repercussions throughout the aerospace sector. Should Boeing respond favorably to the demands placed by these investors, we may witness a thorough review of its strategic activities and perhaps a division into more concentrated entities. Such reorganization could improve financial transparency and operational efficiency, therefore enabling Boeing to be more sensitive to technical developments and market needs.
These improvements could indicate a change in the more general aerospace sector toward more competitiveness and innovation. In view of Boeing's actions, rivals may be forced to reconsider their own plans and practices, therefore generating a wave of comparable restructurings or innovations throughout the industry. As Boeing's needs and procedures change, suppliers may find new opportunities or problems; meanwhile, customers, especially airlines and defense agencies, may gain from better products and services emerging from a nimbler and more targeted Boeing.
Moreover, Boeing's adaptation to activist investor techniques could inspire a more active shareholder environment in usually conservative industrial sectors. This might bring a fresh age of governance and strategic clarity in the aerospace and defense sectors by increasing general industry responsiveness to both market conditions and shareholder concerns.
Warren Buffett's possible involvement as well as activist investors points Boeing to a fundamental change that might dictate the future course of the aircraft giant. There is no doubt that Boeing is under pressure. This public awareness emphasizes the great requirement of strategic agility and strong government inside Boeing to properly negotiate the approaching changes. These events are of great relevance to investors and the environment of the world market and demand close observation of Boeing's strategic choices in the next months.
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2月前
Trump nominee says Boeing needs 'tough love,' EVs should pay for road use
By: Reuters | January 15, 2025
President-elect Donald Trump's nominee to head the U.S. Transportation Department said Boeing needs "tough love" to get back on track after a 2024 mid-air emergency and that electric vehicles should pay to use roads.
"We have to make sure they are implementing their safety plan. We have to push the (Federal Aviation Administration) to make sure they're implementing their safety plan," former House lawmaker Sean Duffy told the Senate Committee at his confirmation hearing.
Duffy said he would work "with Congress and the FAA to restore global confidence in Boeing and to ensure our skies are safe."
"Boeing is a national security issue. Boeing is the largest exporter of American product - incredibly important. In one of my meetings someone said though they need tough love, which is what they do need," Duffy said.
Boeing declined to comment.
The FAA is maintaining tougher oversight of Boeing indefinitely, a year after a door panel missing four bolts flew off a new Alaska Airlines ALK
Boeing 737 MAX 9 in mid-air. It has also barred Boeing from expanding production beyond 38 MAX planes per month.
FAA Administrator Mike Whitaker plans to step down on Jan. 20, while Deputy FAA Administrator Katie Thomson left the agency last week. Trump has not yet named a new nominee to head the department.
A person briefed on the matter said Trump was considering naming former FAA official Chris Rocheleau as deputy administrator, which would put him charge of the agency on Jan. 20.
Rocheleau, a U.S. Air Force veteran who worked at the FAA for more than 20 years, is currently chief operating officer of the National Business Aviation Association.
Most revenue for federally funded road repairs is collected through taxes on diesel and gasoline, which EVs do not pay. "They should pay for use of our roads. How to do that, I think, is a little more challenging," said Duffy.
Some states charge fees for electric vehicles to cover road repair costs. Congress for the past three decades has opted not to hike taxes and instead used general tax revenue to address shortfalls in the federal highway trust fund.
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2月前
Bear of the Day: Boeing (BA)
By: Zacks Investment Research | January 3, 2025
Boeing (BA) has been the premier manufacturer of commercial jetliners for decades. The company’s premier jet aircraft, along with varied defense products, positions it as one of the largest defense contractors in the United States.
Analysts have taken their earnings expectations lower across the board, landing the stock into a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
The stock also resides in the Zacks Aerospace – Defense industry, which is currently ranked in the bottom 28% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.
Boeing
BA shares have faced turbulence over the last year, losing nearly 30% in value and widely underperforming in an otherwise bullish market. Operational issues shed a negative light on the company, with it regularly seeing itself pop up in news headlines.
Its latest set of quarterly results was rather disappointing, with sales falling year-over-year alongside a decline in cash-generating abilities. But the company does recognize its struggles, with CEO Kelly Ortberg stating, ‘It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again.’
Below is a chart illustrating the company’s sales on a quarterly basis.
Image Source: Zacks Investment Research
Keep an eye out for Boeing’s next quarterly release expected at the end of January, with current consensus estimates alluding to a -355% pullback in earnings on -22% lower sales. Both items have been revised lower over recent months, with the top line revisions illustrated below.
Image Source: Zacks Investment Research
Bottom Line
Analysts' negative earnings estimate revisions, resulting from weak quarterly results, paint a challenging picture for the company’s shares in the near term.
Boeing (BA) is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
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2月前
Elon Musk Is Getting Bullish on Boeing Stock. Should You?
By: Barchart | January 2, 2025
Valued at a market capitalization of $109 billion, Boeing (BA) is among the largest manufacturing companies in the world. But in 2024, the aircraft maker has weathered significant turbulence that started with a plug door incident on an Alaska Air (ALK) flight and the subsequent scrutiny of its 737 Max 9 lineup. Boeing stock currently trades 60% below its all-time highs and has remained under pressure since the fatal crashes of two 737 Max 8 planes within a six-month period back in 2018 and 2019.
www.barchart.com
However, Elon Musk appears to be getting bullish on Boeing stock as he expects a change in company management to address safety concerns and rebuild public trust. Musk has expressed confidence in Boeing’s new CEO, Kelly Ortberg, and has praised the leadership change on social media platform X. Notably, Musk criticized the lack of technical expertise associated with Boeing’s former CEO, Dave Calhoun. So, let’s see if Boeing stock can regain lost ground and stage a comeback in 2025.
Boeing Stock Remains Under Pressure
Shares of Boeing fell more than 2% on Monday after another devastating crash of a 737-800 aircraft operated by South Korea-based Jeju Air, which resulted in 179 fatalities. The incident triggered immediate regulatory action, with South Korean authorities ordering comprehensive inspections of all 737-800 aircraft operated by domestic carriers.
Initial reports indicate a potential bird strike may have contributed to the crash, which occurred when the plane landed without proper gear deployment at the Muan International Airport. After hitting a wall, the aircraft skidded off the runway and burst into flames.
Aviation experts note that the 737-800 has maintained a strong safety record over its nearly three-decade service history. The model represents approximately 17% of the active global jet fleet, with about 4,400 aircraft in service. Jeju Air, the largest operator of the model in South Korea with 39 jets, has denied any maintenance-related issues, stating the aircraft was covered by $1 billion in insurance.
What’s Next for Boeing Stock?
Boeing’s regulatory troubles have caused its operating margin to fall to -7.9% over the last 12 months, compared to 11.7% in 2018. Given consensus estimates, Boeing is forecast to report a free cash outflow of $14 billion in 2024. Wall Street expects Boeing to remain unprofitable in the near term, as its free cash outflow is forecast at $2.67 billion in 2025.
Boeing is not generating enough profits to service its debt obligations. In the last four quarters, Boeing reported an operating loss of $5.8 billion, while its interest expenses totaled $2.57 billion.
To shore up its balance sheet, Boeing launched a major capital-raising effort in October, offering $22 billion through a combination of common stock and convertible securities. Notably, the aircraft giant also faced financial pressure from an ongoing machinist strike in 2024, resulting in production disruptions.
The capital raise should help Boeing maintain an investment-grade credit rating and will be used to lower its debt balance. Boeing ended the third quarter of 2024 with $10.5 billion in cash and $53 billion in long-term debt. Comparatively, the company’s long-term debt was much lower at $5.8 billion in 2014.
Is Boeing Stock Undervalued?
Analysts tracking Boeing stock expect the company to report adjusted earnings of $4.26 per share in 2026, compared to a loss of $16 per share in 2024. So, priced at 35 times forward earnings, Boeing stock trades at a premium.
www.barchart.com
Out of the 25 analysts covering Boeing, 14 recommend “Strong Buy,” one recommends “Moderate Buy,” nine recommend “Hold” and one recommends “Strong Sell.” The average target price for Boeing stock is $187.92, indicating upside potential of just 7% from current levels.
Given its regulatory issues, Boeing remains a high-risk investment even at a beaten-down valuation. Despite Elon Musk’s optimistic outlook on Boeing’s new leadership, the aerospace giant faces multiple headwinds that demand investor caution.
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2月前
Boeing Faces Options Barrage After Another Fatal Accident
By: Schaeffer's Investment Research | December 30, 2024
• Boeing's 737-800 is at the center of a deadly crash in South Korea
• BA puts are popular today, but calls have usually ruled the roost
Shares of embattled aerospace firm Boeing Co (NYSE:BAS) are 4.2% lower at $173.23 at last glance, a day after a fatal crash in South Korea involving the company's 737-800 aircraft. The passenger plane was operated by Jeju Air and killed 179 of 181 people on board.
This marks another deadly mishap in a long saga of disasters for Boeing. With today and tomorrow left in 2024, BA is down 34% year to date, the worst-performing Dow stock of the year. On the charts, the $170 level and 200-day moving average are containing today's pullback.
Boeing stock's options pits are brimming with bearish activity. Already, 45,000 puts have crossed the tape, which is seven times the intraday amount. Most popular are the weekly 1/3 170- and 165-strike puts, with new positions being sold to open at both contracts.
Calls have been more popular recently, per BA's Schaeffer's put/call open interest ratio (SOIR) of 0.60 that ranks in the 6th percentile of annual reading. Echoing this, the security's 10-day call/put volume ratio of 2.52 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands above 96% of readings from the past 12 months.
It's worth noting that BA's elevated Schaeffer's Volatility Scorecard (SVS) of 71 out of 100 implies a tendency to outperform volatility expectations -- a boon for premium players.
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3月前
Boeing stock rises following Pegasus Airlines' large order
By: Investing | December 19, 2024
Shares of The Boeing Company (NYSE:BA) climbed 3% today after Pegasus Airlines, Turkey's premier low-cost carrier, announced a significant order for Boeing's 737 MAX aircraft.
The deal includes a firm order for 100 of the 737 MAX 10 models, with options for an additional 100 planes. This order surpasses the size of Pegasus's existing fleet and signals confidence in Boeing's 737 MAX series.
The order is particularly noteworthy as it exceeds the current Pegasus fleet, which consists of 46 A320-200neos, 41 A321-200neos, 7 A320-200ceos, and 16 737-800s. The initial deliveries of the new aircraft are scheduled for 2028, aligning with Boeing's latest guidance for MAX 10 certification, expected in late 2025 to early 2026.
Jefferies analyst Sheila Kahyaoglu commented on the broader implications for Boeing's delivery schedule, stating, "We assume 45 MAX deliveries in Q4 (which could be a stretch, given a big Q4 ramp and 12 delivered in Oct/Nov) with 270 for 2024 and 384 in 2025 (assumes 29/mo production vs. 32/mo deliveries)."
This substantial order from Pegasus Airlines could reflect growing market confidence in the 737 MAX after its previous grounding and safety concerns.
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3月前
Boeing Resumes Production as the Airline Industry Prepares for a Record-Breaking 2025
By: U.S. Global Investors | December 16, 2024
The clouds hanging over Boeing’s operations finally appear to be clearing.
After a turbulent period of setbacks—including crashes, a global pandemic, supply chain snarls and a recent labor strike—Boeing has officially restarted production of the 737 MAX. And while the ramp-up will be gradual, the significance of this for the aviation industry can’t be overstated.
Why? Because the global fleet of commercial airliners has never been older, and carriers are under pressure to modernize.
That should be music to Boeing shareholders’ ears, but it’s also a positive indicator for the entire industry, which looks poised for a record-shattering 2025. With passenger numbers expected to hit record highs and airlines lifting their guidance, the tailwinds are undeniable.
An Aging Fleet Amid Soaring Demand
According to the International Air Transport Association (IATA), the average age of the global fleet of commercial aircraft now stands at 14.8 years—the highest on record. Compare that to the average long-term age of 13.6 years, and it’s clear that airlines are flying older planes for longer periods. These aging aircraft require more maintenance, more fuel and more repairs, all of which weigh on airlines’ bottom lines.
The silver lining? This presents a massive opportunity for new aircraft deliveries, and Boeing’s production restart couldn’t come at a better time. The IATA estimates that 1,254 new planes will be delivered this year, potentially followed by 1,802 deliveries in 2025. That would be just shy of the record 1,813 aircraft that were delivered in 2018.
Boeing’s Bumpy Road to Recovery
Boeing’s journey back to full production has had its challenges. The recent strike by workers halted operations for more than 12 weeks, adding to the planemaker’s headaches. According to Reuters, U.S. regulators capped Boeing’s production at 38 jets per month following the midair blowout incident on an Alaska Air flight earlier this year.
But Boeing is resilient. With production resuming, analysts at Jefferies predict the company will average 29 737 MAX deliveries per month in 2025. That’s still below Boeing’s target of 56 per month, but it represents solid progress for the manufacturer.
Airline executives are taking notice. Alaska Air CEO Ben Minicucci recently acknowledged that while Boeing’s comeback is still a work-in-progress, he’s seeing “an improving trend” under the company’s new leadership.
A Billion-Dollar Vote of Confidence
Airlines themselves are brimming with optimism. Alaska, fresh off its acquisition of Hawaiian Airlines, recently announced a $1 billion share buyback program and issued strong financial guidance. The Seattle-based airline—one of the top performers of 2024, gaining 64% year-to-date—expects to post full-year adjusted earnings of at least $5.75 per share in 2025, exceeding Wall Street’s estimates.
Other major carriers are singing a similarly bullish tune. American Airlines raised its profit expectations for the final months of 2024, thanks to robust holiday demand, higher fares and lower fuel costs.
Southwest Airlines also lifted its revenue outlook, citing resilient travel demand and changes to its revenue management practices.
Record Revenues on the Horizon?
Looking ahead to 2025, the IATA projects total industry revenues to top $1 trillion for the first time in aviation history. Passenger numbers are expected to soar to 5.2 billion, a 6.7% increase from 2024 and another all-time high.
A recent Bloomberg Intelligence survey found that 36% of U.S. travelers plan to take vacations in 2025, up from 28% the previous year. High-income households are leading the charge, with 65% of those earning over $150,000 prioritizing vacations. This is a critical demographic for airlines, as premium travelers generate a disproportionate share of profits.
Wheel’s Up!
Boeing’s production restart is a signal that the industry’s supply-side challenges are being addressed.
Meanwhile, surging demand and record-breaking projections for 2025 suggest that airlines are on the cusp of a new era of profitability.
For investors, travelers and industry stakeholders, we believe the outlook is undeniably bright. The sky’s the limit!
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3月前
Internal Voices Call For Boeing Breakup To Boost Stock By 100%
By: Forbes | December 8, 2024
Once hailed as the height of American aerospace invention and engineering, Boeing now faces several growing difficulties that have aroused shareholder uncertainty and jeopardized its financial viability. The decline of the stock has been brutal. Disputes, manufacturing delays, and eroding market trust have eclipsed the company's heritage over decades of greatness. Unexpectedly, even Boeing's own employees, who form the core of its operations, have begun to support a radical and transformative action: a full Boeing breakup. This internal desire for change shows a growing awareness among companies that their present structure is not efficiently serving their stakeholders. Analysts estimate that this kind of action could potentially double Boeing's stock value. The concept of separation is no longer only a strategic choice; it's becoming necessary for the company's future.
The Call From Within For A Boeing Breakup
In a significant and unexpected development, senior managers at Boeing have expressed their support for dismantling the conglomerate and a full breakup of the company. After Boeing's workforce sent a letter directly to The Edge, expressing their agreement with the firm's recommendation for a corporate breakup, this shift gained momentum. This internal push highlights a profound acknowledgment from those closest to the company’s operations: Boeing’s current structure not only impedes operational efficiency but also hinders its ability to achieve optimal market performance. The alignment of internal voices with external analysis underscores the urgency for transformative change.
Boeing’s Stock Price Decline
Deeply ingrained and growing over time are Boeing's problems. Tragically claiming 349 lives, the 737 MAX catastrophes revealed serious flaws in corporate governance and fundamental safety shortcomings. These events started a chain reaction of problems, including ongoing manufacturing delays, repeated quality control failures, and growing financial losses. Combined, they have seriously tarnished Boeing's once-starry reputation. Investor confidence has dropped; the company's shares have fallen 43% year-to-date, a clear indication of the market's mounting concern on Boeing's capacity to recover.
Boeingf Vs S&PBarchart
The Case For A Boeing Breakup
Separating Boeing into four separate divisions—commercial airplanes, defense, space and security, and global services—could release significant revenue. This approach would let every division concentrate on its main strengths, simplify processes, and improve responsibility. This kind of action reflects General Electric's recent separation, meant to simplify its corporate strategy and increase shareholder value.
Boeing Has A 100% Upside On A Breakup
The Edge Consulting Group, who have advised on breakups for the last 20 years, sees a 100% increase in the stock price from the sum of the parts if Boeing were to break up in the manner suggested. This projection is based on the potential for each standalone unit to achieve higher operational efficiency and profitability, thereby attracting more focused investment.
Employee Sentiment: A Catalyst For Change
The growing demand for a split within Boeing's own ranks is a significant trend. Staff members, who actively participate in the organization's daily operations, are making a strong case for a structural redesign. This is more than just discontent; it's an acknowledgment of fundamental inefficiencies compromising Boeing's capacity for global competitiveness and efficient operation.
Senior leadership and ground crew of Boeing have a detailed awareness of the operational difficulties that outsiders sometimes overlook. Their support of a split highlights a harsh reality: the company's present monolithic structure hinders efficiency, creativity, and finally expansion. These workers have seen personally the knock-on impacts of bureaucratic bottlenecks, quality control problems, and manufacturing delays resulting from a large, clumsy company.
This is an urgent call to action for management, not only a warning. Long-term Boeing performance depends on rebuilding confidence and morale among the employees. Ignoring this internal agreement runs the danger of alienating the very people by keeping the business going. It also runs the danger of widening the gulf between management and the workers vital to Boeing's recovery.
The employees' support of a separation is about a vision for a more nimble, targeted, and responsive Boeing, not only about frustration. They are pushing for a system whereby every division—commercial aviation, defense, services—may function free from the complexity of the bigger body. This is, they think, the secret to releasing the actual potential of the business.
Management must pay attention to this realization and welcome the chance for reorganizing. By doing this, Boeing not only answers staff worries but also sets itself to flourish in a market that is growingly competitive. A separation may revitalize the business, rebuild its reputation, improve operational effectiveness, and maybe release the 100% upside that several analysts, including The Edge, have indicated.
Rare and potent is this moment of employee-driven lobbying. Boeing's leadership has a chance to coincide with the individuals most familiar with the business and guide it toward a rich, sustainable future. Ignoring this threatens not only the business's legacy but also its survival.
A Boeing Breakup Is A Strategic Imperative
The company finds itself at a crucial juncture. A Boeing breakup isn’t just a strategic option—it’s a proven path to revitalization. Intel’s recent struggles highlight what happens when a company clings to outdated structures, hampering its ability to innovate and meet market demands. In contrast, General Electric’s successful breakup demonstrates the power of streamlined focus, operational efficiency, and unlocking trapped shareholder value.
By embracing this transformation, Boeing can follow GE's lead, shedding the inefficiencies that have eroded its legacy and restoring confidence among investors and employees alike. This move would allow its divisions—commercial aviation, defense, and services—to thrive independently, each aligned with market demands and primed for growth. Analysts project a 100% upside if Boeing takes this decisive step, and its own workforce is calling for it.
The choice is clear: adapt and unlock Boeing’s true potential, or risk following Intel's path of stagnation and decline. Over decades, Boeing's employees have created a legacy that is evidence of creativity, commitment, and American aerospace greatness. These are the men and women who built airplanes capable of revolutionizing the planet, backed national defense, and carried mankind upward. Their diligence and unrelenting search of innovation produced a brand that stood for advancement, safety, and trust. But that heritage is now on the brink, taxed by business mistakes, manufacturing delays, safety lapses, and a loss of strategic clarity.
The significance of this heritage cannot be overlooked due to inertia or uncertainty. Boeing's current structure has become too burdensome; it restricts efficiency, stifles creativity, and irritates the very individuals who sustain the business. Those who know the company's shortcomings and its unrealized potential better than anybody else are calling for reform from within.
This isn’t just a business decision; it’s a fight to preserve Boeing’s soul, its workforce, and its standing as a leader in aerospace. The opportunity is diminishing, and delaying is no longer an option.
Boeing must act now. A Boeing breakup needs to happen. The company’s future depends on it.
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3月前
Bear of the Day: Boeing
By: Zacks Investment Research | November 27, 2024
When it comes to aerospace, Boeing (BA) is the name on everyone’s lips. But recently, this industry titan has found itself struggling to get its wings back. Let’s cut through the buzz and dive into why Boeing might not be the high-flyer it once was, and why I’m naming it today’s Bear of the Day.
Boeing is a leading American multinational corporation in the aerospace and defense sectors. The company designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide, and provides leasing and product support services.
It seems like every time Boeing starts to pick up altitude, it gets hit with more turbulence. The aerospace giant has been dogged by supply chain disruptions, causing delays in production. And it’s not just about the materials—skilled labor shortages continue to plague the industry, leaving Boeing struggling to meet delivery timelines.
In the post-COVID world, supply chain issues have become a tired excuse, but investors demand results. Boeing’s inability to iron out these problems raises questions about management’s effectiveness in navigating a tricky macroeconomic environment.
Over-promise and under-deliver has become the mantra at Boeing recently. A quick look at the Price, Consensus and Surprise Chart outlines this. Earnings estimates seem to start sky high every year then spend the rest of the year being walked back.
That’s a big reason why the stock is currently a Zacks Rank #5 (Strong Sell). Over the last sixty days, no fewer than eight analysts on Wall Street have cut their earnings estimates for the company. The negative moves have dropped our Zacks Consensus Estimate for the current year from a loss of $4.23 to a loss of $16.20. Next year’s number has been cut from a profit of $3.32 to a meager 6-cents.
Image Source: Zacks Investment Research
A feather in the bull’s cap here, revenue growth is forecast to return in grand fashion next year. After contracting 10.5% for FY24, Wall Street is now expecting 23% growth next year to $85.9 billion.
The Aerospace – Defense industry is currently in the Bottom 46% of our Zacks Industry Rank. There are a handful of names in the industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) Leidos (LDOS) as well as Intuitive Machines (LUNR).
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DiscoverGold
DiscoverGold
4月前
Is Boeing Stock a Buy? 5 Pros and 1 Big Risk to Watch in 2024
By: Market Beat | November 18, 2024
The Boeing Company BA has had a tumultuous 2024 mired by regulatory issues, negative publicity, lay-offs, rising debt, stock dilution, and mounting losses capped off by a 33,000 worker machinists’ union strike.
The aerospace sector giant has seen its stock lose 46.2% year-to-date (YTD), hitting levels not seen in over two years. Many investors may believe Boeing’s incumbent position as an American monopoly and global duopoly for commercial airplane manufacturing makes it a viable long-term hold despite the short-term pain.
The incoming Trump administration’s core “Made in America” theme drives its initiative to bolster American supply chains in the name of national security. Many believe that Boeing is too vital to America to go under.
Let's take a look at five reasons to buy Boeing stock—and one reason to avoid it altogether.
1. The Union Strike Is Finally Over; Production Can Resume
The Boeing machinists’ strike started on Sept. 13, 2024 when over 33,000 workers walked off the job at the Everett and Renton plants in Seattle. This put an immediate production halt to its Boeing 737, 777, and 767 airplanes, pushing the company's losses to more than $6 billion in its third quarter of 2024. Analysts believe Boeing lost around $5.5 billion in earnings due to the strike.
The resulting cash crunch prompted Boeing to raise over $20 billion in a stock offering to improve its liquidity position and fend off potential downgrades from ratings agencies. This move, however, resulted in shareholder dilution. The company is also laying off 10% of its 177,000-person workforce in a restructuring effort to trim costs.
On Nov. 4, 2024, Boeing reached a settlement with the machinists for a 38% pay raise over four years, a $12,000 ratification bonus, and improved 401k benefits. With nearly 59% of the strikers voting to approve the new contract, the strike officially ended, and production is set to resume in a few weeks.
2. Boeing Has Over $500 Billion of Backlog
While Boeing is often referred to as part of a global duopoly with Airbus SE EADSF, U.S. airlines tend to favor Boeing due to its strong domestic presence and longstanding relationships. However, American Airlines Group Inc.
AAL
continues to place significant orders with Airbus, such as the A321neo.
Boeing holds a dominant position in the U.S. market for commercial aircraft. The post-pandemic travel boom has driven all the major airlines to upgrade their fleets, which means more airplane orders for Boeing. Actually, more than they can handle.
The company is currently managing substantial order backlogs for several major airlines:
• United Airlines Holdings Inc. UAL is waiting on 497 airplanes and has cut its 2024 deliveries by 102 fewer planes.
• Southwest Airlines Co. LUV, which exclusively only flies Boeing 737 planes, is still waiting on the delivery of 432 Boeing 737 Max airplanes.
• Emirates is waiting for 240 planes.
• Delta Air Lines Inc. DAL is willing to wait until 2026 and even 2027 for its first 737 MAX 10 airplane, which they ordered 100 of and were expected to be delivered over four years starting in 2025.
As of the end of September, Boeing had a backlog of 6,197 airplanes, costing just over half a trillion dollars. Unlike many businesses in this uncertain macroeconomic climate, Boeing certainly has no demand problem. It has more business than it can handle. The problem is execution and capacity, definitely not demand.
3. The Big Contract Deals Still Keep Rolling In
On Oct. 1, 2024, Boeing won $8.46 billion of multiple U.S. Department of Defense contracts for the Navy and Air Force. Boeing’s total U.S. defense contracts rose to $34 billion in October 2024, up 40% year-over-year, despite the machinist strikes.
On Nov. 7, 2024, Israel’s Defense Ministry announced a $5.2 billion deal to purchase at least 25 Israeli F-15 fighter jets out of Boeing’s St. Louis facilities.
4. End-of-Year Tax Loss Harvesting is Magnifying the Selling
Every year, tax loss and tax loss harvesting selling takes place from November through December. This involves selling stocks that are underperforming or down for the year to realize capital losses to offset capital gains in your portfolio. While this is commonplace with individual investors, it's the mutual funds and hedge funds that can make a dramatic impact on share prices.
With Boeing stock falling 46.2% YTD compared to the 23.2% gain in the S&P 500 index, there's no doubt funds are divesting Boeing stock. Tax loss selling magnifies the losses. However, the silver lining is that these stocks tend to rally back in January as funds re-enter their positions after the 30-day wash rule. For bullish investors, it pays to buy into the selling for a bounce in January.
5. BA Stock Is Nearing a Powerful Weekly Double-Bottom Support Level
A double bottom is a significant price level where a stock finds a floor and bounces. The bounce eventually exhausts as the stock falls back to the prior bottom to put in another bottom near or at the same level before it stages a higher rally. A double bottom that gets retested and bounces again forms a triple bottom. The wider the time frame chart, the more significant the double bottom levels become.
BA formed a double bottom around the $121 level in May and then October of 2022. While BA stick technically fell as low as $113.00 in June, it’s important to note that the candlestick body remained at or above the $121.00 level every time it fell below. After the second bottom formed sharply at $121.00, BA staged a massive rally to a peak of $267.54 by December 2023.
However, that was the highest peak and the head of a bearish head and shoulders pattern as each bounce peaked at a lower high. The right shoulder peaked at the weekly anchored VWAP at $196.95, literally on the nose, in July 2024. BA stock has accelerated its selling to continue to drive the neckline sharply lower. The weekly RSI has plunged to the oversold 30-band. Fibonacci (Fib) pullback support levels are at the $131.43, $121.00 double bottom, $93.90 and $89.00 pandemic low.
BA’s average consensus price target is $190.37, and its highest analyst price target sits at $250.00. It has 14 analyst Buy ratings, 9 Holds, and 2 Sell Ratings. The stock has a 3.06% short interest.
Bullish investors can consider using cash-secured puts to buy BA at the Fib pullback support levels or consider buying LEAPS at Fib extension levels to capture the upside without deploying the full capital of owning the stock. If the LEAPS are or become deep in the money (ITM), then selling front-month out-of-the-money calls activates a Poor Man’s Covered Call strategy to generate income.
The 1 Reason to Avoid Boeing Stock: Trump Tariffs Could Cripple Boeing’s Margins and Ignite a Trade War
Boeing imports nearly 30% of the parts for its airplanes from international suppliers, which adds up to a lot of parts. Boeing 787, for example, has 2.3 million parts. Boeing even has a factory in China that finalizes painting and interior work before planes are delivered to Chinese airline customers.
During his previous term, President Trump imposed tariffs on various imports, including a 25% tariff on steel and a 10% tariff on aluminum from multiple countries, including the European Union. These measures increased production costs for U.S. manufacturers, including aerospace companies like Boeing, which rely on these materials for aircraft construction.
During his 2024 re-election campaign, Trump proposed a blanket 10% to 20% tariff on all imports and a 60% to 100% tariff on products imported from China. The actual actions are a wait-and-see situation.
The imposition of tariffs led to retaliatory actions from affected countries, resulting in reduced demand for U.S. exports. For instance, Boeing experienced a decline in aircraft deliveries to China, a significant market for the company, following the previous escalation of trade tensions. In 2018, 24% of Boeing's plane deliveries were to China, but from 2019 until December 2023, the company did not make any deliveries to the country.
Analysts have expressed concerns that a renewed trade war with China could be a punishing setback for Boeing, as the company has been eager to resume sales in one of the most lucrative airliner markets in the world.
The reintroduction of tariffs could lead to increased production costs for Boeing due to higher prices for imported materials and potential retaliatory tariffs from other countries. These factors could adversely affect Boeing's competitiveness in the global aerospace market and its financial performance.
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DiscoverGold
DiscoverGold
4月前
Urgent Action Required: Boeing's Future is at Stake - A Open Letter To Kelly Ortberg, CEO, Boeing
By: Barchart | November 17, 2024
Dear Mr. Ortberg.
Re: Time to Fix Boeing Before It’s Too Late
Once the glory of American invention and a worldwide leader in aerospace, the Boeing Company is today at a turning moment. Being a long-term value generator and supporter of shareholder interests drives me to draw attention to the systematic mistakes endangering Boeing's future. Your leadership finds one at a crossroads: either risk supervising Boeing's ongoing slide into mediocrity or act decisively to restore its legacy.
A Legacy at Risk
Boeing's problems are self-inflicted; they have nothing to do with outside pressure or state of the market. Mismanagement, a lack of strategic vision, and giving short-term gains top priority over long-term development have destroyed public confidence and shareholder value.
• The 737 MAX Debacle:
This crisis was not simply a product failure but a breakdown in leadership, culture, and accountability. The prioritization of cost-cutting over safety has caused irreversible reputational harm, exposing systemic flaws in Boeing’s engineering ethos - a cornerstone of its success.
• A Dysfunctional Portfolio:
The commercial airplanes and defense divisions, once vital assets, have become persistent liabilities. Operational inefficiencies and unprofitability weigh heavily on the entire organization. In contrast, the services division—an example of what Boeing could be—remains shackled to the dysfunction of the broader business.
• Stagnation in Innovation:
While competitors like Airbus are pushing boundaries, Boeing appears content with the status quo. This complacency is unacceptable for a company with its resources, history, and potential to lead the aerospace industry.
Breaking Up Boeing: A Bold Yet Pragmatic Solution
The time has arrived to separate Boeing into three independent companies: Defense, Commercial Airplanes, and Services. This is a sensible idea based on the possibility to release value and propel operational excellence, not a radical one.
• Focus and Accountability:
Each business would be laser-focused on its core strengths, free to innovate and compete on its own terms. For instance, the services division could thrive without subsidizing underperforming segments.
• Operational Efficiency:
A breakup would streamline decision-making, eliminate unnecessary bureaucracy, and enable leaner, more agile operations.
• Unlocking Shareholder Value:
As separate companies, Boeing’s divisions could be valued more accurately by the market. Wall Street rewards focus, and in its current state, Boeing lacks the clarity investors seek.
• Proven Playbook:
General Electric’s successful breakup serves as a blueprint. GE Aerospace’s post-split success demonstrates that separating complex businesses can revitalize operations and create immense shareholder value.
A Call to Action
Boeing cannot afford further delays or half-measures. By failing to act boldly, the leadership risks failing its shareholders, employees, and the aerospace industry.
We have conducted an in-depth analysis of a potential breakup, evaluating the operational and financial benefits. I would be happy to share our findings with you or your advisors for further discussion. This is not just an idea—it is a well-considered and actionable path forward.
I urge you to:
• Convene the board to explore a strategic breakup.
• Commit to a clear timeline for evaluating and executing the separation.
• Communicate transparently with shareholders and employees about the rationale and benefits of this decision.
Internal & External Threats
Boeing’s decline is not just a corporate failure; it is a national concern. The United States cannot afford a weak Boeing, and neither can the global aerospace industry. Competitors like Airbus are already capitalizing on Boeing’s vulnerabilities.
The growing aerospace aspirations of China exacerbate Boeing's inner conflict. Directly targeting Boeing in the single-aisle and widebody sectors, the Commercial Aircraft Corporation of China (COMAC) is fast progressing its C919 and C929 aircraft. Boeing runs the danger of losing more market share in one of the fastest-growing aviation sectors as Air China already committed as the launch client of the C929.
Airbus keeps growing its presence in China with improved production capacity in Tianjin, therefore surpassing Boeing in both market penetration and inventiveness. This twin threat from Airbus and COMAC emphasizes how urgently Boeing needs to move strategically and forcefully to preserve its position. Without transformative action, Boeing’s market share, reputation, and legacy will erode further.
You can not only fix Boeing but restore its standing as a global leader in aerospace. The question is: will you seize it?
Sincerely,
Jim Osman
CEO & Founder
The Edge Consulting Group
A Committed Shareholder and Advocate for Long-Term Value
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