Boeing Co. has had a tumultuous year, with its stock market decline being the largest since 2008. The company's shares have dropped by 35% in 2024, making it one of the top 20 decliners in the S&P 500 Index. Despite some stabilization in share prices, investor sentiment remains cautious due to various crises that have affected confidence in Boeing's future.
The year started with a setback when a door plug on a Boeing aircraft detached mid-flight during an Alaska Air operation. This incident led to public scrutiny of Boeing's practices and culture, resulting in a management overhaul and the departure of the CEO. Other issues, such as serious allegations from whistle-blowers, a labor strike, and significant cash burn, have further impacted Wall Street's profit expectations. Analysts now anticipate a loss of $15.89 per share, a significant contrast to the previous year's expected earnings of $4.18 per share.
The fallout from Boeing's crises has led to a significant downward revision of profit estimates for the coming years. Projections for 2025, 2026, and 2027 have been reduced by approximately 50% or more compared to previous levels. This highlights the challenges Boeing faces as it tries to recover from setbacks. Analysts have a dim outlook for the recent recovery in Boeing's shares, with an average 12-month price target suggesting only a potential 7% gain from the recent closing price of $169.65.
Boeing's struggles are further complicated by its global supply chain, which exposes it to potential trade frictions. The possibility of tariff proposals by President-elect Donald Trump adds uncertainty to Boeing's situation, as it could be caught in a trade war along with other major American manufacturers. This adds complexity to the company's already precarious position, as investors consider the risks associated with potential tariffs in light of Boeing's recent crises.
Investor sentiment remains cautious as Boeing navigates through these challenges. The company, which had shown signs of recovery after the fatal crashes in 2018 and 2019, now faces a critical juncture. The optimism surrounding Boeing's stock has been replaced by a more guarded outlook as stakeholders grapple with the implications of ongoing challenges and the potential for further disruptions in the future.