BA Stock: Boeing Co. (BA) saw a notable rise in its stock price on October 21, surging 4.8% to close at $159.82, marking its highest point since early September. This spike comes as the company nears a possible resolution to a labor strike that has severely impacted its operations. Over the weekend, the International Association of Machinists and Aerospace Workers (IAMAW) announced that its 33,000 members would vote on a revised contract proposal from Boeing on October 23.
Labor Strike Costing Boeing $1 Billion Per Month
The strike, which began on September 13, has halted production of key aircraft models, including the 737 and 777, costing Boeing an estimated $1 billion per month. Boeing’s latest contract offer—its third in less than two months—includes a 35% wage increase over four years and a $7,000 ratification bonus. However, a major sticking point remains: Boeing’s refusal to reinstate its traditional pension plan, which many union members view as critical.
Analyst Reactions and Price Target Adjustments
Analysts are offering mixed reactions to the proposed deal. JP Morgan’s Seth Seifman maintained an overweight rating on Boeing but lowered his price target to $195, citing concerns about the labor agreement potentially raising Boeing’s annual expenses by $1 billion. Jefferies analyst Sheila Kahyaoglu estimates a $1.3 billion cost increase from the deal but did not adjust her price target. Meanwhile, Wells Fargo’s Matthew Akers slightly reduced his price target from $110 to $109, pointing to uncertainty surrounding the contract vote.
Earnings Report Ahead: Boeing Braces for Loss
Boeing is set to release its third-quarter earnings on October 23, and the company has already warned of significant losses. Preliminary figures indicate a $9.77 per share loss and a $6 billion quarterly deficit—the largest since 2020 when the pandemic decimated aircraft demand. Boeing expects revenue of $17.84 billion, slightly above analysts’ predictions of $17.82 billion.
New CEO Aims for Stability Amid Uncertainty
Boeing’s new CEO, Kelly Ortberg, who took over in August 2024, has been focused on streamlining operations and addressing quality control issues. Ortberg has cut 10% of Boeing’s global workforce and is pushing to reduce operational costs without sacrificing production capabilities. His efforts are seen as critical for Boeing’s long-term success, especially as the company faces mounting pressure from the strike.
Chart Analysis: Key Levels to Watch for BA Stock
Current Price: $157.06, down 1.76% after today’s trading session.
Resistance Levels: Boeing faces its first resistance at $162.44, followed by a stronger cap at $191.48.
Support Levels: Immediate support is at $152.82, with a more significant lower level at $146.19 if bearish momentum continues.
RSI (Relative Strength Index): Currently at 51.48, indicating neutral momentum but with signs of potential weakness ahead.
Analyst Reactions and Price Target Adjustments
Despite the grim third-quarter results, analyst reactions remain mixed. JP Morgan’s Seth Seifman held an overweight rating but lowered Boeing’s price target to $195, factoring in the costs associated with labor disruptions. Jefferies’ Sheila Kahyaoglu estimated an additional $1.3 billion in annual expenses but refrained from setting a new target. Wells Fargo’s Matthew Akers trimmed his price target slightly to $109, emphasizing concerns about the ongoing strike and its potential long-term impacts on Boeing’s finances.
Short-Term vs. Long-Term Outlook
For short-term traders, Boeing’s immediate future hinges on whether the stock can hold above the critical $152.82 support level. If that support fails, more downside could follow, potentially pushing the stock lower to $146.19. However, long-term investors may still find reasons for optimism. Boeing’s broader recovery story, while bumpy, remains intact, driven by robust demand for its aircraft and CEO Kelly Ortberg’s efforts to improve the company’s operational efficiency.
Boeing’s Path Forward
With Boeing set to release its full third-quarter earnings on October 23, all eyes are on the labor vote taking place the same day. If the revised contract is approved, Boeing may see a path to recovery, stabilizing production and potentially alleviating some financial strain. However, if the union rejects the deal, the strike could drag on, creating further uncertainty and weighing heavily on the stock.
Investor Sentiment: While today’s stock dip highlights concerns over Boeing’s near-term challenges, the company’s long-term prospects hinge on resolving labor disputes and improving production efficiency. For now, investors will closely monitor the outcome of the labor vote and Boeing’s third-quarter earnings report to gauge the company’s ability to rebound in the months ahead.
What’s Next for Boeing?
As the labor vote approaches, the outcome could significantly affect Boeing’s future. If the contract is approved, Boeing may regain stability, but a rejection could lead to further turmoil, including more layoffs or, in the worst-case scenario, even a bankruptcy filing.
For now, BA stock remains resilient, buoyed by investor optimism surrounding a potential resolution to the labor strike and Boeing’s broader efforts to stabilize its operations. Investors will be watching closely for the results of the October 23 vote and Boeing’s upcoming earnings report, with volatility likely in the near term.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses incurred from this content.
