The Boeing Co (NYSE:) has had a turbulent 2024, facing regulatory issues, negative publicity, lay-offs, rising debt, stock dilution, and mounting losses, culminating in a 33,000 worker machinists’ union strike. Despite these challenges, Boeing remains a key player in the aerospace sector, with a strong position as an American monopoly and a global duopoly for commercial airplane manufacturing. Here are five reasons to consider buying Boeing stock, along with one reason to exercise caution.
### 1. The Union Strike Is Finally Over; Production Can Resume
– The strike, which began on Sept. 13, 2024, resulted in a halt in production of Boeing 737, 777, and 767 airplanes, leading to significant losses.
– Boeing raised over $20 billion in a stock offering to improve liquidity, resulting in shareholder dilution.
– A settlement was reached with the machinists for a 38% pay raise over four years, ending the strike and allowing production to resume.
### 2. Boeing Has Over $500 Billion of Backlog
– Boeing holds a dominant position in the U.S. market for commercial aircraft, with significant order backlogs from major airlines.
– The post-pandemic travel boom has driven airlines to upgrade their fleets, leading to more airplane orders for Boeing.
– The backlog of 6,197 airplanes as of September 2024 amounts to over half a trillion dollars, indicating strong demand for Boeing’s products.
### 3. The Big Contract Deals Still Keep Rolling In
– Boeing won $8.46 billion of multiple U.S. Department of Defense contracts in October 2024, with total defense contracts rising to $34 billion.
– A $5.2 billion deal was announced with Israel’s Defense Ministry for the purchase of F-15 fighter jets.
### 4. End-of-Year Tax Loss Harvesting is Magnifying the Selling
– Tax loss harvesting selling takes place from November through December, impacting stock prices.
– Boeing stock has fallen significantly YTD compared to the S&P 500 index, leading to divestment by funds.
– Stocks tend to rally back in January after tax loss selling, presenting an opportunity for investors.
### 5. BA Stock Is Nearing a Powerful Weekly Double-Bottom Support Level
– BA stock is approaching a significant support level, indicating a potential bounce.
– A double bottom pattern around the $121 level in May and October 2022 suggests a potential reversal.
– The weekly RSI has plunged to oversold levels, indicating a possible turnaround in BA stock.
In conclusion, despite the challenges faced by Boeing in 2024, the company’s strong position in the aerospace sector, backlog of orders, and recent contract wins suggest potential for growth. However, investors should consider the risks associated with the stock, such as ongoing operational challenges and market volatility. By staying informed and conducting thorough research, investors can make informed decisions about investing in Boeing stock.
Boeing Stock Analysis: Key Support Levels and Price Targets
Boeing (BA) is a well-known aerospace company with a diversified portfolio of products and services. Understanding the key support levels and price targets is essential for investors looking to make informed decisions about this stock.
Fibonacci Pullback Support Levels
- $131.43
- $121.00 (double bottom)
- $93.90
- $89.00 (pandemic low)
These Fib pullback support levels provide important points of reference for investors to consider when analyzing Boeing’s stock performance.
Analyst Price Targets
BA’s average consensus price target is $190.37, with the highest analyst price target reaching $250.00. The stock has received 14 Buy ratings, 9 Holds, and 2 Sell Ratings. Additionally, there is a 3.06% short interest in the stock.
Investment Strategies
Bullish investors can explore various strategies to capitalize on Boeing’s stock movements:
- Consider using cash-secured puts to buy BA at the Fib pullback support levels
- Explore buying LEAPS at Fib extension levels to capture the upside potential
- Implement a Poor Man’s Covered Call strategy by selling front-month out-of-the-money calls on deep in the money LEAPS
The 1 Reason to Avoid Boeing Stock: Potential Impact of Trump Tariffs
Boeing faces potential challenges due to the impact of tariffs proposed by former President Trump. These tariffs could significantly affect Boeing’s margins and ignite a trade war, leading to adverse consequences for the company.
Implications of Tariffs on Boeing
Boeing heavily relies on international suppliers for parts, with nearly 30% of its airplane components coming from overseas. The imposition of tariffs on imports could escalate production costs for U.S. manufacturers, including Boeing, affecting their competitiveness in the global market.
Trade War Concerns
The threat of a trade war, particularly with China, poses a significant risk to Boeing’s business. Previous trade tensions led to a decline in aircraft deliveries to China, a key market for the company. Renewed tariffs could further impact Boeing’s financial performance and market position.
Financial Outlook
The reintroduction of tariffs may result in increased production costs for Boeing, along with potential retaliatory actions from other countries. This could hinder Boeing’s ability to compete effectively in the aerospace industry and impact its overall financial health.
Analysis of Boeing Stock
Boeing’s stock analysis highlights the importance of considering key support levels, price targets, and external factors such as trade tariffs. Investors should be cautious about potential risks associated with trade tensions and tariffs, as these factors could significantly impact Boeing’s financial performance and market position. By staying informed and understanding the implications of external factors on Boeing’s stock, investors can make more informed decisions about their investment strategies.