On Thursday, TD Cowen sustained its Buy rating on Boeing (NYSE:BA) shares, with a steady price target of $190.00. The firm's analysis suggests that the results of the International Association of Machinists (IAM) contract vote will be known later today, with the outcome currently unclear.
Should the contract be approved, it is expected that Boeing's cash usage could continue until mid-2025, and there may be a potential equity offering towards the end of the year.
The firm acknowledges the challenges Boeing faces but also recognizes the positive aspects under the leadership of new CEO Ortberg. The analyst from TD Cowen believes that Ortberg has a credible approach to turning the company around, and there is a strong possibility for significant cash flow improvement in the years 2026 to 2027.
Despite this optimistic outlook, the analyst notes that Boeing's stock is likely to remain under pressure until the ongoing strike is resolved.
The current situation with the IAM contract and the potential equity offering are critical factors that investors are watching closely, as they could significantly impact Boeing's financial health and stock performance in the near term. Meanwhile, the long-term prospects highlighted by the firm hinge on the successful implementation of CEO Ortberg's strategies and the resolution of the labor dispute.
Boeing's stock performance and investor sentiment in the coming months will likely be influenced by these developments as the aerospace giant navigates through its current challenges. The company's ability to manage cash flow and labor relations effectively will be pivotal in achieving the anticipated upside in the next few years.
In other recent news, Boeing has been facing a range of challenges, from labor disputes to financial difficulties. The company's ongoing strike involving approximately 33,000 workers recently reached a critical point as the workforce voted against a contract proposal, which included a 35% pay increase over four years and improved 401(k) contributions.
This labor dispute has amplified the strain on Boeing's operations and supply chain, already impacted by production halts of its top-selling 737 MAX jets, as well as its 777 and 767 widebody aircraft.
Recently, Baird revised its price target for Boeing, reducing it to $200 from the previous figure of $240, while maintaining an Outperform rating on the aerospace giant's stock. Barclays, meanwhile, sustained its Equalweight rating on Boeing, highlighting the company's ongoing cash burn through 2025.
In its latest quarterly earnings call, Boeing revealed a slight revenue decline to $17.8 billion and a core loss per share of $10.44. Despite these challenges, the company emphasized its robust backlog and the dedication of its workforce. These are the recent developments that investors need to keep an eye on as they unfold.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Boeing's financial situation, complementing TD Cowen's analysis. The company's market capitalization stands at $97.03 billion, reflecting its significant position in the aerospace industry. However, Boeing's financial metrics reveal some concerning trends that align with the challenges mentioned in the article.
InvestingPro Tips highlight that Boeing may have trouble making interest payments on its debt, which could exacerbate the cash usage concerns mentioned by TD Cowen. Moreover, the company is not profitable over the last twelve months, with a negative P/E ratio of -14.48, underscoring the financial pressures it faces.
The revenue growth for Boeing has been negative, with a -3.25% decline in the last twelve months. This aligns with another InvestingPro Tip indicating that analysts anticipate a sales decline in the current year. These factors may contribute to the potential equity offering discussed in the article.
Despite these challenges, it's worth noting that Boeing's stock has shown some resilience, with a 1-month price total return of 0.8%. However, the year-to-date return of -39.75% reflects the ongoing difficulties the company is facing.
Investors seeking a more comprehensive analysis can access additional insights through InvestingPro, which offers 8 more tips for Boeing, providing a deeper understanding of the company's financial health and market position.
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