Boeing Co (NYSE: BA) is currently a mixed bag. The Arlington County, Virginia-based company reported better-than-feared quarterly results and noted stabilization in its 737 Max supply chain, despite outrage and potential lawsuits over two tragic crashes.
Outgoing CEO Dave Calhoun continues to tout safety and quality initiatives, with the goal of providing some assurance towards Boeing's commitment to long-term viability. Still, its stock price remains below its five, 20, and 50-day moving averages, indicating prevailing bearish sentiment among investors.
Risk-takers may consider this a buy-the-dip moment with a long-term horizon.
Earnings
Boeing's stock was up 3.3% at market open on Wednesday, April 24, on the heels of a first-quarter (Q1) earnings beat.
Over the past year, however, the stock is down over 18%, -35% year-to-date.
The higher-than-expected Q1 financial results recorded a 31.52% surprise on the EPS number and an 8.86% surprise on revenue.
The company demonstrated financial strength amidst adversity. However, Boeing's stock price reflects a bearish trend, trading below key moving averages and exhibiting signs of slight selling pressure.
Opportunities Ahead
Analysts maintain a 'Buy' rating on Boeing, with a consensus price target of $203.08. Since Jan., Boeing stock has seen a slew of price target revisions to the downside.
While recent challenges have impacted short-term performance, analysts view Boeing's long-term prospects favorably, attributing potential upside to recovery efforts and future growth opportunities. The last three analysts that reviewed the stock, April 16 onwards, have an average price target of $181.67 on Boeing stock. That's an implied 5.32% upside from current levels.
Key Risks
Market sentiment towards Boeing remains cautious. Technical indicators such as the MACD and RSI signal a sell-off and oversold conditions, respectively.
Despite near-term challenges, the company's earnings performance, business resilience, and analyst consensus appear to support the notion of underlying value.
Investors would be wise to exercise caution and monitor regulatory developments and supply chain stability before initiating positions.
Boeing's business and stock are currently subject to certain key risks:
- Regulatory Scrutiny and Compliance Issues: Boeing's ongoing regulatory scrutiny, highlighted by the FAA's findings of noncompliance across its supply chain, poses a significant risk. Any further regulatory setbacks could impede production and delivery schedules, impacting financial performance and investor sentiment.
- Supply Chain Disruptions: Despite efforts to stabilize the 737 Max supply chain, ongoing disruptions remain a key concern. Any delays or quality control issues within Boeing's supply chain could exacerbate production challenges, leading to decreased revenue and increased costs.