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Market Analysis
Boeing Restarts Production on Key Planes, Stock Sees Slight Gains
Boeing has restarted production on key jets such as the 777/777X following a seven-week strike that ended last month.
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Boeing (NYSE: BA) has restarted production across its airplane programs, including the 737 MAX, 767, and 777/777X, following a seven-week strike by 33,000 factory workers that ended last month.
The strike began on September 13, 2024, and significantly impacted the company’s output and deliveries. In November, Boeing only delivered 13 commercial jets compared to 56 in the same month the previous year.
The Federal Aviation Administration has since increased oversight due to a safety incident in January 2024. Boeing CEO Stephanie Pope emphasized the importance of employee training and certifications as production resumes, ensuring safe and high-quality airplane deliveries.
Boeing Restarts Production on Key Jets
The seven-week labor strike involved 33,000 unionized machinists and was primarily driven by disputes over employee benefits and compensation.
The International Association of Machinists and Aerospace Workers eventually approved a new contract, with 59% of members voting in favor. The agreement includes a 38% wage increase over four years and a $12,000 cash bonus for hourly workers.
During the strike, Boeing had cut off employee healthcare benefits and announced plans to lay off 17,000 workers, adding pressure to resolve the dispute. The strike led to estimated economic losses of $7.6 billion for Boeing, further complicating the company’s ongoing challenges, including quality control issues.
Boeing Stock Brief (BA)
Boeing’s stock opened at $173.28 and reached a current price of $176.32 as of 10:39 EST on December 18, 2024. The day’s trading saw a low of $172.61 and a high of $176.72.
The stock’s 52-week range has been between $137.03 and $267.54, indicating significant volatility over the past year. Key financial metrics for Boeing include a beta of 1.572, a forward P/E ratio of 252.36, and a market capitalization of $131.92 billion.
The company’s total revenue is reported at $73.29 billion, with a trailing EPS of -$12.94 and a forward EPS of $0.47. Analysts have set a target mean price of $182.21 and a median price of $190.00, suggesting potential for growth.
Deutsche Bank recently issued a “buy” rating, while Susquehanna provided a “positive” outlook. Despite the recent uptick, Boeing’s market capitalization stands at approximately $115.93 billion, with analysts’ target prices ranging from a low of $85.00 to a high of $250.00.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
