Boeing Analysis

Boeing Analysis

Chart done on hourly timeframe. One of the world’s few leaders in aircraft manufacturing is sitting at a new 52 week low despite record demand for some of their models. Boeing’s growing pains are nothing new to its investors. The company has a long history of quality control struggles and mishaps, some deadly and some shocking; however one thing remains the same, Boeing is still the number one plane manufacturer in the world and airlines keep coming back. Unfortunately this doesn’t mean the market will turn a blind eye to the negative headwinds. Manufacturing mistakes and quality issues are extremely costly, and those costs are expected to reflect on Boeing earnings later this month. Boeing’s revenue has been on the rise towards pre-pandemic highs, but is not yet back at their 2018 101B highs. 2023’s revenue came in at a total of 79B, a 16% improvement from 2022, but net income continues to struggle. Boeing booked its fifth consecutive year of net income losses, crushing its appeal to investors. Their balance sheet is also failing to grow in a healthy direction, with assets far outweighed by liabilities. Free cash flow is at a decent 4.4B, but that could plummet with manufacturing costs and design flaws. 

In the last year, Boeing has reached a high of 267.00, but is now sitting at the lows of 173.00. The company’s highs could be accredited to their 737 Max and 787 Dreamliner order book, but even the demand for those planes couldn’t justify the quality flaws, leading it to the lows we’re seeing now. Nonetheless, Boeing customers from the Middle East, India, and various other parts of the world are still in queue to receive their orders. Now the company just has to fulfill these orders in a timely and up-to-quality manner. 

Boeing’s financial health is subpar, but their position in the aircraft market, for both commercial and defense planes, makes them an attractive buy for a long term outlook. However current market sentiment is extremely bearish going into earnings and it will likely remain so unless there’s a positive catalyst that eclipses all the bad. It’s worth noting that analysts are projecting Boeing to move back towards profitability as soon as Q2 of 2024 and continue growing its bottomline from there. This gives the company a good chance to begin a turnaround in this coming quarter in anticipation of those estimates, but their earnings this month should shed better light on guidance. 

In the short term:

If you’re looking at Boeing in the short term, the stock is in a bearish trend and volume doesn’t indicate a reversal. The lows it reached this week of 171.40 can be used as support guidance and the supports that follow are plotted on the chart. Buyers need a breakout above 175.45 to gain any control.