Boeing Stock Drops After Labor Dispute: CFRA Lowers Price Target to $151 - What You Need to Know
In a recent turn of events, Boeing Co. (NYSE:BA) saw its stock value decline following a revised price target and ongoing labor disputes. CFRA has adjusted Boeing's 12-month price target to $151 from $174, while maintaining a Sell rating on the shares. The labor strike by over 30,000 union members has disrupted airplane assembly at Boeing's facilities in Seattle and Portland, impacting production of models like the 737 Max.
CFRA's revised price target is based on a 20 times multiple of the projected earnings per share (EPS) for 2026. The firm has also adjusted its anticipated loss per share for 2024 and lowered the expected 2025 EPS. The impact of the strike is expected to affect Boeing's 2025 earnings due to increased labor costs.
Boeing's new CEO, Kelly Ortberg, faces challenges in managing the labor situation and potential adjustments to consensus expectations. The strike's duration remains uncertain, but CFRA assumes it will be resolved within 2024. Ratings agencies Fitch and S&P have expressed concerns about a potential credit rating downgrade for Boeing.
Despite the challenges, BofA Securities maintained a Neutral rating, while Wolfe Research and Jefferies reaffirmed their Outperform and Buy ratings respectively. The outcome of the strike could have significant implications for Boeing's financial health, with potential cash flow costs of $3 billion to $3.5 billion if it lasts 50 days.
InvestingPro Insights reveal that Boeing has a market capitalization of approximately $96.74 billion and is trading near its 52-week low. The company faces profitability concerns and may struggle with interest payments on debt. Analysts do not anticipate Boeing to be profitable this year. However, being a key player in the Aerospace & Defense industry may provide some resilience in the long term.
For investors seeking detailed analysis, additional InvestingPro Tips are available to gauge the potential risks and opportunities ahead for Boeing. Stay informed to make informed investment decisions in light of ongoing developments.
In conclusion, Boeing's stock value decline and labor disputes have raised concerns about the company's financial health and market position. Investors should closely monitor the situation and consider the potential impacts on their investments. Stay informed and consult with financial experts to make well-informed decisions in this evolving landscape.