Amidst a wave of incidents plaguing Boeing (NYSE:BA), lawmakers are divesting their holdings in the aerospace giant, sparking questions about the company’s prospects and investor confidence. Let’s delve into the latest challenges facing Boeing and the bipartisan exodus of politicians from its stock.
Boeing’s Troubled Trajectory
Boeing’s tumultuous journey took a further nosedive in early January when a panel blew out of one of its jets mid-flight due to missing bolts on a door plug, prompting a Department of Justice criminal probe. This incident adds to the company’s woes, already marred by the grounding of its 737 Max fleet for two years following fatal crashes in 2018 and 2019, claiming 346 lives.
Reflecting its struggles, Boeing’s stock (NYSE:BA) has plummeted over 31% since the beginning of the year, making it one of the worst-performing stocks among the S&P 500 components. Despite trading at a discount compared to its historical valuation metrics, cautious investors are wary of the company’s current state.
Bipartisan Stock Sell-Off in Congress
Congressional disclosures reveal a bipartisan trend of lawmakers shedding Boeing shares in response to mounting uncertainties. Representative Blake Moore (R-Utah), a House Budget and Ways & Means Committees member, offloaded BA shares worth up to $15,000 shortly after the Alaska Air incident. Similarly, Representative Bill Keating (D-Mass.), serving on the Armed Services and Foreign Affairs Committees, followed suit, selling Boeing shares in late February.
Examining Boeing’s Financial Health
Boeing’s profitability remains a concern, with the company reporting profits only once in the past 16 quarters. Despite exceeding Wall Street’s expectations in Q4 of fiscal 2023, Boeing’s revenue has significantly declined from $101 billion in fiscal year 2018 to $77.8 billion in fiscal 2023. While the company aims to substantially increase free cash flow by 2025-26, CEO Dave Calhoun emphasized a focus on quality rather than offering a financial forecast for 2024.
Analyst Outlook on BA Stock
Despite the challenges, analysts have not abandoned Boeing entirely, given its dominant position alongside Airbus in the aerospace industry. Goldman Sachs remains bullish on BA, with analyst Noah Poponak raising the price target to $268, indicating a potential upside of 48.9% from current levels. Overall, analysts maintain a cautious optimism towards Boeing stock, with the majority maintaining a “Strong Buy” rating and a mean target price suggesting significant upside potential.
Featured Image: Freepik
Author Faith Yakubu 
