Boeing’s (NYSE: BA) long-haul flight to the bottom of the stock price chart doesn’t look like it will end any time soon — on October 14, a week before the company’s October 23, Q3 2024 earnings report, three equity researchers from major Wall Street firms revised their price targets downward.
At press time, BA stock is trading at $148.89 — with a 4.28% decrease over the last thirty days bringing year-to-date (YTD) losses up to 40.86%.
BA’s systemic issues
BA share price has seen a tumultuous decline since September 2023, when the aircraft manufacturer first warned of potential production delays for 737 MAX jets owing to quality control issues that forced it to ground several jets.
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As 2024 began, a slew of disastrous issues occurred — a mid-flight explosive decompression on an Alaska Airlines flight on January 5, an engine fire that caused a 747-8 plane to make an emergency landing in Miami on January 19, and a cockpit window cracking on a 737 MAX 9 jet on an All Nippon Airways domestic flight.
This was exacerbated by several insiders deciding to turn whistleblower — over the course of the year, Joshua Dean, a quality auditor at Spirit AeroSystems (NYSE: SPR), Sam Salehpour, engineer and former employee, and John Barnett, a 30-year Boeing veteran and quality manager, are the most notable.
Salehpour alleged that physical threats were made against him after raising concerns. Dean and Barnett unfortunately passed — the former from a rapid bacterial infection, the latter from a self-inflicted gunshot wound after failing to show up for the second part of his testimony against Boeing.
In 2023, the aviation leader had 11 reports filed to the FAA by workers alleging safety issues — there have been 126 just in the first five months of 2024. In September, supply chain issues came to a head when key production milestones were delayed by six months.
Analysts revise BA price targets amidst strike and disappointing results
Just a week ahead of Boeing’s Q3 2024 earnings report, three equity analysts revised their price targets for BA.
Cal Rumohr of TD Cowen maintained his ‘Buy’ rating, reducing the price target from $200 to $190, opining that the current CEO’s ‘reset plan to revive the company’ will likely cause huge losses in the quarter.
JPMorgan’s Seth Seifman reiterated an ‘Overweight’ rating, although the price target was slashed from $235 to $195. Seifman expects that the aerospace giant’s increased cash burn and $4 billion in outstanding debt will require a $15 billion equity raise in 2025.
TD Cowen’s estimate sees a 27.35% upside in the stock. JPMorgan’s price target, if met, would see BA share price rise by 30.7% — while Wells Fargo’s forecast sees a 26.94% downside. It’s quite notable, however, that two out of three companies essentially remain bullish on the stock in the long term.
Finally, Matthew Akers, a researcher from Wells Fargo reaffirmed an ‘Underweight’ rating, and reduced his price target from $110 to $109, echoing Seifman’s expectation of an equity raise.
In the short to medium term, however, BA stock price likely won’t see a big recovery — the company released disappointing preliminary Q3 results on October 11, is set to fire one-tenth of its workforce in the midst of a far-reaching strike that has been ongoing from July and has drawn the ire of crucial partners like Dubai’s Emirates airline.
