The Boeing Co. (BA, Financial), the iconic multinational corporation that designs, manufactures and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment and missiles worldwide, has seen business suffer of late, and has become a source of discouragement for many Wall Street investors. But others see opportunity.
The naysayers have a point. Just over two years ago, Boeing’s stock was trading at about $460 per share. A year ago, those shares were going for $269.19. As of midday Tuesday, Boeing's stock was hovering around $177.82, up about 5.05% or $8.40 per share.
Many in the investment community feel the company has gotten a bad rap. Boeing suffered during the pandemic, but so did everyone in the commercial aviation industry. When business started to return, Omicron set it on its heels again. Once that variant began to recede, supply chain woes cropped up to impact business and lower stock price.
Then came the invasion by Russia – one of the world’s major suppliers of raw materials that are used to build aircraft - of Ukraine, which has resulted in its being cut off from much of the world’s economy and the prices of aluminum and titanium rising. Boeing has since announced it will hold off buying titanium from Russia, at least for the foreseeable future, which has caused its stock to dip once again.
It was reported early Tuesday that Boeing delivered 22 jetliners during February, the smallest number since last August, as a pause in Dreamliner handovers continues to weigh on the company. Twenty of those aircraft were 737 Max planes, CNBC pointed out. It continued, “Deliveries of jets are crucial for Boeing and other manufacturers because that’s when customers pay the bulk of the plane’s price.” Wide-body 787 Dreamliner deliveries have been held back for much of the last year and a half, as executives and engineers work on reported flaws in manufacturing.
Some analysts and investors, however, are coming to recognize the impediments bedeviling Boeing are largely situational, and will not last. That is why many on Wall Street say they see a buy opportunity in Boeing stock.
“Plain common sense should tell you that while the problems Boeing is facing at the moment are real, they are also temporary,” noted Martin Tillier, the author of 'Market Musings' on Nasdaq.com. “The commercial aviation industry will recover, and when it does airlines will face an urgent need to replace aging planes. At the same time, commodity prices will drop back once the short-term disruption is over because they always do. When those two things meet, Boeing will have a growing order book and serious pricing power and the stock will bounce back.”
At the same time, investors also recognize Boeing’s share price is volatile, and that an even better bargain can still be had in the months to come. Simply Wall Street suggested the company’s revenue is projected to rise by about 56% over the next few years. It noted, “If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.”
