The recent decline in Boeing (BA) stock value has raised concerns among investors and industry analysts, leading to a detailed examination of various factors affecting the stock’s value. The sale of Boeing shares by a congressional member has become a significant issue, sparking speculation about the reasons for the sale at the time and whether the downward trend in Boeing stock value will continue.
Challenges Faced by Boeing
The decline in Boeing’s stock value has been attributed to a series of production errors and safety issues, casting doubts on the company’s commitment to maintaining high-quality and safety standards. These issues have affected key Boeing aircraft models like the 737 Max and 787 Dreamliner, indicating widespread problems within the company. These issues have drawn attention from regulatory agencies and government officials. Boeing’s shares have experienced a 28% decline in 2024. In January, an incident involving a Boeing 737 aircraft belonging to Alaska Airlines occurred during flight, involving the detachment of a portion of the aircraft’s outer coating.
Despite Boeing’s challenges, its situation did not improve with a report published by The Wall Street Journal on Friday, indicating that Boeing instructed airline companies to inspect pilot seats on 787 Dreamliner aircraft. This instruction came after suspicions arose that a pilot seat issue may have caused a sudden downward tilt of an aircraft belonging to Latam Airlines.
These production and safety concerns have led to delays in production and increased regulatory scrutiny, contributing to a significant decrease in confidence in the company’s operations and consequently to the decline in Boeing’s stock value.
Sale of Boeing Shares by a Congressional Member
As Boeing’s shares face challenges, it was revealed that Representative Bill Keating sold his shares in Boeing.
The Capitol Trades website reported that Keating sold Boeing shares valued between $1,000 and $15,000 on February 28. Keating also sold Boeing corporate bonds worth $15,000 to $50,000 on February 8.
These transactions have sparked debate in recent days, with Twitter users expressing concerns about the timing of the share sale.
Forecasts for Boeing Shares
Wolfe Research analysts recently adjusted their price forecast for Boeing, reducing it from $270 to $260 per share, but still claiming that the stock will perform well. Analysts believe the stock has a 40% potential for growth.
While acknowledging that the recent decline in the stock price was due to increased scrutiny and uncertainty following the incident involving Alaska Airlines’ aircraft door in early January, they pointed to Boeing’s “strong growth potential in cash flow” as a reason for their positive outlook on the stock.
Additionally, in early February, UBS lowered its price target for Boeing to $275 but maintained its positive Buy rating on the stock. They see the recent decline in the stock price as an opportunity for investors willing to take a longer-term perspective.
In contrast, in January, Bank of America analysts downgraded Boeing’s rating to Neutral after the Alaska Airlines incident. At that time, they noted that Boeing was once again under significant regulatory scrutiny.
The bank also stated, “The suspension of operations and the requirement for the Federal Aviation Administration to maintain current production rates will likely prevent Boeing from achieving the production, delivery, and Free Cash Flow targets it presented during its 2022 investor event for 2025/2026.”
source: tr.investing.com/ prepared by Melisa Beğiç