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Valued at a market cap of $96.8 billion, The Boeing Company (BA) designs, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services. The Arlington, Virginia-based company’s customers include domestic & foreign airlines, the U.S. Department of Defense, NASA, other aerospace prime contractors, and certain U.S. government and commercial communications customers.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and The Boeing Company fits the label perfectly. As a leading global aerospace company, it serves customers in more than 150 countries and continues to expand its product line and services to meet emerging customer needs.
Despite its strengths, the aircraft manufacturer’s shares have slipped 42.1% from its 52-week high of $267.54 reached on Dec. 21, 2023. Moreover, over the past three months, BA declined 3.7%, significantly lagging behind the SPDR S&P Aerospace & Defense ETF’s (XAR) 14.1% gain.
Moreover, in the longer term, BA has declined 33.7% over the past 52 weeks, significantly underperforming XAR’s 32.2% returns. On a YTD basis, shares of BA are down 40.5%, massively lagging behind XAR’s 27.1% gains over the same time frame.
To confirm its bearish price trend, BA has been trading below its 200-day moving average since late January. However, the stock has been trading above its 50-day moving average since late November.
The primary causes of BA's poor performance over the past year are the company's quality control problems with its 787-jet model, which necessitated rework, and a slowdown in its 737-production rate due to inspections following the Alaska Airlines incident. Another significant blow to Boeing's operational performance was the seven-week labor strike, which ended on Nov. 4. These factors negatively impacted the company's recent Q3 performance as well.
Moreover, on Oct. 23, BA's shares plunged 1.8% following its Q3 earnings release. The company’s revenue fell 1.4% year-over-year to $17.84 billion and came in line with Wall Street’s forecasted figure. However, its adjusted loss widened significantly by 220.2%, totaling $10.44 per share, and missed the consensus estimates of a loss of $10.34 per share.
BA’s underperformance becomes even more evident when compared to its rival, Lockheed Martin Corporation (LMT), which gained 15% over the past 52 weeks and 14.1% on a YTD basis.
Despite BA’s underwhelming price action so far, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 24 analysts covering it, and the mean price target of $187.25 suggests a 20.8% premium to its current levels.
