Baird has reaffirmed its positive stance on Boeing (NYSE: NYSE:BA), maintaining an Outperform rating and a $240.00 price target.
The aerospace giant is expected to announce its third-quarter financial results on October 23.
Ahead of this, Boeing has disclosed preliminary figures that include new charges from certain programs within its Commercial Airplanes (BCA) and Defense, Space & Security (BDS) units, along with the impact of the International Association of Machinists (IAM) work stoppage.
Boeing anticipates reporting a revenue of $17.8 billion for the third quarter of 2024. The company is also bracing for a significant GAAP loss per share of ($9.97), alongside an operating cash flow deficit of ($1.3) billion. Despite these setbacks, the company's cash reserves remained substantial, closing the quarter at $10.5 billion.
In response to the financial challenges, Boeing has announced a workforce reduction plan. The company is set to decrease its total workforce by approximately 10%, which will affect a range of positions including executives, managers, and employees.
These cutbacks are expected to take place over the upcoming months as Boeing adjusts to the current operating environment.
InvestingPro Insights
As Boeing prepares to release its third-quarter results, InvestingPro data and tips provide additional context to the company's financial situation. Boeing's market capitalization stands at $93.05 billion, reflecting its significant position in the aerospace industry. However, the company's financial health shows signs of strain, with a negative P/E ratio of -32.8 over the last twelve months as of Q2 2024, indicating ongoing profitability challenges.
InvestingPro Tips highlight that Boeing "may have trouble making interest payments on debt" and "suffers from weak gross profit margins." These insights align with the company's announced GAAP loss per share and operating cash flow deficit. The tip noting that Boeing is "trading near 52-week low" is particularly relevant given the recent stock performance, with a year-to-date price total return of -42.06% as of the latest data.
The planned workforce reduction of 10% appears to be a strategic move to address these financial pressures. This decision is underscored by another InvestingPro Tip stating that "net income is expected to drop this year," suggesting ongoing challenges that the company is attempting to mitigate through cost-cutting measures.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Boeing, providing a deeper understanding of the company's financial position and market outlook.
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