Boeing stock
BOEING
+0.94%
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opening:197.93
High:201.49
low:195.14
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It recently dropped due to a variety of reasons, the most recent being the news that the 767 series refueling planes used by the US Air Force have a quality problem and fixing the problem will likely affect its quarterly results.
Investors don’t play around when it comes to quality issues, the production and delivery of 787 series planes were previously suspended for several months due to a problem with a certain component in the front part of the plane. The company then calmed down and said that the malfunction does not pose a danger to the planes that have already been shipped, the stoppage of shipments came after an order from the American Aviation Authority, which wanted to be more cautious and conservative than Boeing. The 737 MAX series was grounded for 8 months in 2019 due to a design flaw.
In addition, JP Morgan commented on the situation at the time, with analyst Seth Siepman saying that: “If we reduce the delivery of additional 787 aircraft during the first half of 2023, the company’s cash is expected to fall to $6.7 billion in the middle of the year, after debt repayments amounting to of 3.75 billion dollars”. Siipman explained that the 787s were an important component in regards to the company’s results in the past year.
Boeing has missed analysts’ forecasts in 12 of the last 15 quarters, the missed forecast often causes increased volatility in the stock and the erosion of management training. Something that investors don’t really like. The company’s shares continued to decline, after the Fed announced a 0.25% increase in interest rates.
Two months ago, the company published its financial statements for the last quarter of 2022 and for the entire year, where it reported revenues of $20 billion and a loss of $1.75 per share, in line with analysts’ expectations in terms of revenues, but the bottom line was that the expectation was for a profit per share of $0.17. The company’s operating loss was $365 million compared to an operating loss of $720 million in the corresponding quarter in 2021. The EBITDA was 137 million dollars compared to a negative figure of 186 million dollars in the corresponding quarter.
About two weeks after the reports, publications appeared that the company plans to lay off about 2,000 employees, this after the company said that it expects to increase its total number of employees by 10,000. The company managed to generate a free cash flow amounting to 3.13 billion dollars in the past year and it predicts that in the whole of 2023 it will be able to generate a flow of between 3 and 5 billion dollars.
Despite this there is some good news on the horizon, it seems that the company Raynar
RYANAIR HLDS PLC
+0.17%
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opening:93.15
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plans to purchase 737 MAX series aircraft that will join its existing fleet of Boeing aircraft that contains more than 400 aircraft. In addition to this potential order, Japan Airlines has ordered 21 737 MAX aircraft.
Recently, Boeing CEO Dave Calhoun also said that the company’s delivery problems are beginning to disappear. After years of problems in the distribution chain, in design and quality. This is perhaps the best news that the company has published. Boeing has encountered many problems with its planes, when in recent years – the company had to ground the planes of the 737 MAX after several of these suffered malfunctions that led to the deaths of hundreds of people.The cases happened between 2018 and 2019, when the company reported false statements regarding the safety of those planes.
Analysts at the research firm Wolfe gave Boeing stock a target price of $220 and said they believe Boeing can generate $10 billion in free cash flow by the middle of the decade. Let’s just mention that Boeing reached this area in 2017 and 2018 when it produced 11.6 billion dollars and 13.6 billion dollars respectively. Data received before the corona epidemic and the production problems encountered.
The company has risen 3.5% since the beginning of the year and trades at a value of 123 billion dollars.
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