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Boeing’s stock has faced significant volatility, reflecting a combination of operational challenges, labor disputes, and broader market concerns.
The company’s stock price fell by approximately 39% in 2024, as the aerospace giant grappled with issues that included production delays, safety concerns, and an impactful labor strike that temporarily halted aircraft production.
Challenges
America’s largest jet maker has been struggling for quite some time with persistent challenges, such as quality control issues with its 787-jet model, resulting in a required rework, as well as the slowdown in its 737-production rate owing to inspections following the Alaska Airlines incident at the beginning of this year.
The latest seven-week-long labor strike at the company that ended on Nov 4, 2024, caused a production pause for some of its key jet programs, both commercial and defense, and was another major blow to Boeing’s operational performance.
Boeing’s third-quarter revenues and earnings suffered, which might have been a key reason investors lost confidence in the stock. This was duly reflected in Boeing’s latest share price performance.
Boeing is issuing layoff notices to more than 100 employees across Florida starting in January 2025.
Hopes For Recovery
Despite the setbacks, Boeing continues to secure new orders, which help provide some relief to its financial position. In particular, Boeing has secured a notable government contract, signaling that demand for its products remains robust, especially in the defense and aerospace sectors.
This demand, especially from governments and military organizations, helps stabilize the company’s revenue streams and mitigate some of the negative impacts from its commercial side. Boeing recently announced receiving a $135 million order from the U.S. Army for three additional CH-47F Block II Chinook helicopters.
Boeing’s growth prospects for its services and defense businesses remain strong. The demand for aircraft aftermarket services has been increasing due to rising air travel, with a solid backlog of $20.45 billion at the end of Q3 2024. Additionally, geopolitical tensions are fueling demand for Boeing’s defense products, including combat jets and missiles, which should continue to support growth in this sector.
However, the company’s commercial aircraft business faces challenges, mainly due to the lingering effects of a recent labor strike. This unit, which accounts for nearly 44% of Boeing’s total revenues, is expected to underperform in the near term, potentially impacting the company’s overall financial results in the next one to two quarters.
Technical Analysis
Source: TradingView
Boeing Company stock rebounded after forming a low on November 14 at $138. Price formed a double top with the October 23 level at $160.
The stock then moved above the 15 and 65 EMAs but still under the 200 EMA, which could indicate that the downtrend may continue. RSI shows a bearish momentum that nears overbought territory. Traders will be watching for a move towards $154 if price fails to move above resistance.
If the stock price does manage to break higher, it could signal the start of a new uptrend by breaking its previous level at $160, moving above the 200 EMA to establish momentum.
