Boeing’s (BA) share price continues to trail the market as it moves from issue to issue. The stock price has fallen by more than 30% by 2024, and 34% since the high of this year.
Boeing lost to SpaceX
Boeing’s latest loss comes from its Defense, Space, and Security segment which accounted for over $6 billion of revenue in the previous quarter.
NASA released a statement Saturday stating that SpaceX was chosen to transport two astronauts home from the space due to concerns over Boeing’s Starliner. Boeing always claimed that the Starliner was safe for them to return home.
NASA’s decision to select SpaceX over Boeing is a sign that it believes the latter company to be safer. This raises questions about future NASA contracts.
The news is damaging to Boeing’s image in government, and with other customers.
Financially, however, there will be no big losses for the company, as the space segment is a major cash generator.
Boeing loses market share
Boeing’s stock has been weakening because the company is under intense pressure in recent years.
In 2018, a Boeing 737 MAX crash in Indonesia was followed by a similar accident involving Ethiopian Airlines.
It was a costly solution. The company reported a loss of $636 million in 2019, as revenue fell to $76.6 billion, from $101 Billion a year ago.
In 2020, the company’s largest annual loss was $11 billion due to the pandemic.
Now, the company is working to reduce its losses. In 2023, the company’s loss fell from $5 billion to $2.2billion. In 2021, it paid $2.5 Billion in settlements and in 2022 another $200 M for securities regulators.
Boeing was again in a crisis this year, when some planes began to develop problems. This led to a new grounding of the FAA. The Federal Aviation Authority, as well as the DoJ, also conducted an investigation.
Airbus has gained a larger market share in civil aviation. Boeing’s most recent financial results showed that the total order backlog was $516 billion and included 5,400 commercial aircraft.
Airbus has an order backlog of 8 585 planes, and it is unlikely that Boeing can regain its share. Airbus has even been considered by some of Boeing’s long-time clients.
Boeing’s 777x test program was halted after structural damage was discovered.
Turnaround Strategy
Boeing has a costly strategy in place to improve its performance, and the easiest way is by replacing the CEO. Kelly Ortberg will replace Dave Calhoun who earned millions of dollars in the company. She previously led Collins Aerospace.
It has announced plans to purchase Spirit AeroSystems in 2025. The company hopes to enhance the quality of services by bringing back its spun-off 2005 subsidiary.
Boeing also pledged to improve its manufacturing and safety processes to avoid the current issues.
It is not surprising that the company’s revenue dropped by 15 percent to $16.6 Billion, as it was forced to stop many planes. Analysts had expected a loss of $1.4 billion. However, it jumped up to more than $1.4 billion.
I am confident that Boeing, despite these difficulties, will turn its business around, particularly under the new management. These turnarounds have worked well for companies such as General Electric, Rolls-Royce and Danaher. This turnaround, however, will require time.
Boeing’s main advantage is its oligopoly status. Airbus can’t increase production as quickly. Boeing is therefore the only option for companies who use it. Although its planes were recently scrutinized, they still have a good safety record.
Boeing stock price analysis
On the daily chart we can see the BA share price had reached a low of $159.64 at the end of May, as the company’s woes escalated. The stock price formed what appears to be a double bottom pattern and moved up to $174.
Boeing is still below its 50-day moving average and the 100-day exponential moving average (EMA). This is an indication that the bears still have control.
The stock is therefore likely to remain within the levels of support and resistance at $192 and $159.64. Bullish breakouts will be confirmed only if the stock moves over $192 resistance. It will then rise up to $213 which is the point of 50% retracement, or 22% higher than the current price.
The post Boeing Stock Price Forecast: Turnaround to Take Time may change as new updates are released.
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