Boeing Company (NYSE: BA) stock is trading lower on Tuesday. Bank of America expects the stock to experience some volatility after the company's striking machinists voted to approve the plane maker's latest labor contract proposal.
What To Know: The International Association of Machinists and Aerospace Workers (IAM) voted to ratify Boeing's labor proposal on Monday, with 59% of the votes in favor of the deal.
In a new note to clients on Tuesday, BofA analyst Ronald Epstein said recently appointed Boeing CEO Kelly Ortberg "added another check to the 'Boeing Turnaround' list" by bringing an end to what had been a 53-day strike. Although Epstein is optimistic about the news, he cautioned that a return to normal operations could still take a while.
"While the strike ending and workers returning to the shopfloor is a meaningful step in the right direction, ramping back up will take time," the BofA analyst said.
Epstein pumped the brakes on Boeing's production ramp, noting that some employees will have to go through retraining sessions after returning to work by Nov. 12.
The offer included a 38% wage increase over four years, enhanced retirement contributions and improved health benefits. Union members also gained flexibility in receiving their one-time $12,000 ratification bonus, with options to allocate it toward their paycheck, 401(k) or a combination of the two.
"While the full impact of the strike and how quickly production restarts remain to be determined we leave our estimates unchanged and maintain our Neutral rating. However, we do expect to see some volatility in Boeing's share price," the analyst said.
BA Price Action: At the time of writing, Boeing shares were down 2.05% at $151.94, per data from Benzinga Pro.