Boeing (BA) Delivered Only 14 Jets in October Amid $7.6B Strike Impact, Down 50% y/y

In October 2024, Boeing (NYSE: BA) faced a significant setback as its commercial jet deliveries were slashed by more than half compared to the same month the previous year. The delivery of only 14 jets, a stark contrast to the 34 jets delivered in October 2023, was primarily due to a seven-week strike that severely disrupted production.

This industrial action, which began on September 12, 2024, and concluded on November 5, 2024, brought the production of several key models, including the 737 MAX, 767, 777, and 777x, to a halt. The strike’s financial impact was profound, with direct economic losses estimated at $7.6 billion, adding to Boeing’s ongoing financial struggles.

Boeing Strike Involved Over 33,000 Unionized Machinists Demanding a Fair Deal

The strike involved 33,000 unionized machinists from the International Association of Machinists and Aerospace Workers (IAM), who demanded better compensation and benefits. The resolution came with Boeing offering a 38% wage increase over four years, a $12,000 cash bonus for hourly workers, and enhanced retirement contributions.

However, despite these concessions, the new offer did not reinstate pensions, opting instead for increased 401K contributions. The agreement was approved by 59% of IAM members, ending the strike and allowing Boeing to resume production.

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Boeing’s Third Quarter Loss a Further Hit to the Aerospace Giant

Boeing’s financial woes were further highlighted by a third-quarter loss of $6.1 billion and a year-over-year revenue decline from $18.1 billion to $17.8 billion. The company’s stock has reflected these challenges, showing a year-to-date decline of 40.75%.

As Boeing aims to recover, it plans to increase the production of the 737 model to 38 jets per month, a move intended to boost revenues and stabilize its financial position.

The stock market has not been kind to Boeing amid these challenges. As of November 13, 2024, Boeing’s stock opened at $145.58 but had dropped to $142.605 by 10:15 EST (at the time of writing). The stock’s day low was $141.75, which also marks its 52-week low, while the 52-week high stands at $267.54.

Despite the recent downturn, analysts have set a target high price of $250.00 and a target low price of $85.00, with a mean target price of $183.54 and a median target price of $192.50, suggesting a mixed outlook for investors.

In terms of key metrics, Boeing’s market cap is valued at $106.61 billion, with a beta of 1.572 indicating higher volatility compared to the market. The forward P/E ratio stands at a steep 303.4149, reflecting investor skepticism about future earnings growth.

The company also faces challenges with its book value at -$38.123 and a trailing EPS of -$12.93, although the forward EPS is projected to be $0.47. The quick ratio of 0.238 and current ratio of 1.125 suggest liquidity issues, but the recommendation remains a “Buy” with a recommendation mean of 2.4, indicating some confidence in a potential turnaround

Disclaimer: The author does not hold or have a position in any securities discussed in the article.