May 2024
With Boeing safety incidents on the increase, delayed orders and an upcoming and imminent Starliner launch, I figured its time to take a closer look at the Boeing share price.
Social media
Research indicates that sentiment towards Boeing is negative at present and searches on Twitter reveals major concerns around the suspicious deaths of two whistleblowers recently. Google Trends also reveal that the most searched related queries to Boeing over the last 12 months are related to the whistleblowers:
That’s not where it ends, the top 25 searches are predominantly negatively slanted sentiments.
This issue alongside the postponement of the Starliner launch of its first ever manned launch and associated technical issues is another major red flag for the commercial & defense aircraft manufacturing titan.
The share price
The NYSE listed company has been trading in the range 159.70 to 267.54 over the last year and a look over the last 5 years reveal the damage suffered during the COVID lockdown:
Deliveries
Another major issue at the aviation company is the fact that they have fallen behind on deliveries and have a massive backlog to fill. This may very well be another compounding factor in terms of the slack quality control or it may be THE ISSUE of why we are witnessing safety incidents AND whistleblower activity.
Cutting corners to try and maintain profit margins may be the cause of the issue and a closer look at their financial position is warranted.
AFS
The last three years’ audited financials (and current unaudited quarterly results) are dire:
Boeing has been posting losses for the last three years* and well on its way to post another loss for the 2024 year. (*2021’s consolidated comprehensive income shows a profit after an actuarial adjustment on pension and postretirement benefits. With a 57,000 strong workforce, these kind of adjustments are seriously impactful!)
Brass tacks
I’ve taken a short CFD position on Boeing and so far I’m in the red. I haven’t held the position for long and taking a short position is typically a long game but the cost of overnight funding on the position has me currently scratching my head on a reasonable exit strategy.
The fact remains that the market is always right even when it is wrong and I’m formulating a counter argument as to why my short position remains in the red. The share buy rate price has to drop to or below $176.67 for my position to enter green territory.
37% of Boeing’s revenue is from its defense division (environmentally friendly bombers anyone?) and with a $12 billion (2023 figure) nest egg at hand from the good years, the company has room to maneuver.
As far as aviation giants go this company is probably too big to fail as well and its in the best interests of airlines all over the world that one of their longest standing ‘hardware’ partners get its act together and stop making headlines. The media scrutiny may just be shining a spotlight on a company that actually has a solid future ahead of it.
After all, there is a Boeing commercial or defense ‘product’ taking off and landing (nearly) every second of every day.** (** Boeing 2023 Annual Report)