Boeing Company (BA)

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Bear of the Day: Boeing
By: Zacks Investment Research | November 27, 2024

When it comes to aerospace, Boeing (BA) is the name on everyone’s lips. But recently, this industry titan has found itself struggling to get its wings back. Let’s cut through the buzz and dive into why Boeing might not be the high-flyer it once was, and why I’m naming it today’s Bear of the Day.

Boeing is a leading American multinational corporation in the aerospace and defense sectors. The company designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide, and provides leasing and product support services.

It seems like every time Boeing starts to pick up altitude, it gets hit with more turbulence. The aerospace giant has been dogged by supply chain disruptions, causing delays in production. And it’s not just about the materials—skilled labor shortages continue to plague the industry, leaving Boeing struggling to meet delivery timelines.

In the post-COVID world, supply chain issues have become a tired excuse, but investors demand results. Boeing’s inability to iron out these problems raises questions about management’s effectiveness in navigating a tricky macroeconomic environment.

Over-promise and under-deliver has become the mantra at Boeing recently. A quick look at the Price, Consensus and Surprise Chart outlines this. Earnings estimates seem to start sky high every year then spend the rest of the year being walked back.

That’s a big reason why the stock is currently a Zacks Rank #5 (Strong Sell). Over the last sixty days, no fewer than eight analysts on Wall Street have cut their earnings estimates for the company. The negative moves have dropped our Zacks Consensus Estimate for the current year from a loss of $4.23 to a loss of $16.20. Next year’s number has been cut from a profit of $3.32 to a meager 6-cents.


Image Source: Zacks Investment Research

A feather in the bull’s cap here, revenue growth is forecast to return in grand fashion next year. After contracting 10.5% for FY24, Wall Street is now expecting 23% growth next year to $85.9 billion.

The Aerospace – Defense industry is currently in the Bottom 46% of our Zacks Industry Rank. There are a handful of names in the industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) Leidos (LDOS) as well as Intuitive Machines (LUNR).

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