In a recent announcement, Boeing (BA:NYE) shared its outlook regarding the delivery of its 737 jetliners. Although there’s a bit of relief in the news, the adverbial phrase “just barely” taints it. On Thursday, trading experienced a slight dip as the aviation giant faced scrutiny in its efforts to reach its delivery target, which might influence Boeing stock forecast.
Meeting Goals, Yet Missing Expectations:
Boeing’s aspiration for this fiscal year revolves around the delivery of 400 to 450 aircraft, a figure that promises a formidable presence in the aviation industry. Regrettably, Boeing seems poised to inch across the 400-plane threshold. It is far from the robust numbers investors had been hoping for.
The root of Boeing’s quandary lies in the unanticipated challenges arising from its suppliers’ stumbles. A recent mishap with Spirit AeroSystems (SPR:NYE), where improper hole drilling disrupted the structural integrity of critical cabin pressure bulkheads, served as an ominous harbinger. This incident not only hindered production but also cast doubts on Boeing’s quality control measures.
Suppliers and Counterfeit Parts:
Boeing’s supply chain was spoiled by counterfeit engine components that infiltrated the assembly lines of both Boeing and Airbus (EADSF:OTC). Airlines using aircraft from both giants grappled with engine problems linked to these substandard parts. Authorities traced these counterfeit components back to AOG Technics, along with the discovery of fake certification documents. The revelation not only raises eyebrows but also underscores the importance of stringent quality checks throughout the aviation ecosystem.
Meanwhile, Boeing is striving to bolster its defense portfolio by sealing a deal with Poland for the F-15EX fighter jets. This strategic move aims to diversify Boeing’s revenue streams and reaffirm its commitment to the defense sector.
Boeing Stock Forecast:
Investors and analysts are keeping a watchful eye on Boeing’s course given the recent challenges it has faced. According to a consensus of 15 analysts, the average target price for The Boeing Company’s stock over the next 12 months is USD 250.06. This target, while seemingly optimistic, reflects analysts’ faith in Boeing’s ability to navigate its current hurdles.
Analysts Ratings:
Boeing stock forecast seems unaffected as it enjoys an average rating of “Buy.” However, it’s worth noting that Stock Target Advisor’s own analysis takes a more cautious stance, categorizing Boeing’s prospects as “Bearish.” This assessment is based on two positive signals counterbalanced by nine negative signals, suggesting that the path forward may be fraught with uncertainties.
As of the last closing, The BA stock was valued at USD 216.05. Over the past week, the stock has experienced a modest decline of -3.56%, while the past month has been less forgiving, with a notable decrease of -9.32%. On a more encouraging note, the stock has surged by an impressive +38.54% over the last year.
Conclusion:
Boeing’s struggle to meet its delivery target casts a shadow on its near-term prospects. The challenges stemming from supplier mishaps and counterfeit parts have tested the company’s strength. However, with a “Buy” rating, there is still faith in Boeing’s ability to overcome these obstacles. The aviation giant’s strategic shift toward defense deals, such as the potential sale of F-15EX fighter jets to Poland, signals its commitment to diversifying its revenue streams.
