Admittedly, it was likely an awkward conversation when aerospace company Boeing (BA) went back to the table with striking machinists, its pockets stuffed full of cash from the recent stock sale that went even better than expected. But apparently, talks went well, and Boeing was up nearly 2% in Wednesday afternoon’s trading.
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Acting Labor Secretary Julie Su was back in the fray, hoping to get Boeing back to work before the Biden Administration departs for good. And Su had good news of sorts, which likely will not come as a surprise. Su described the meeting as “…a productive face-to-face meeting with the company to address key bargaining issues.”
Admittedly, Boeing is getting closer to a win. Its first offer, which featured a 25% pay raise over four years, was rebuffed by around 95% of the union. Its second offer, with a 35% pay raise, cut the rejection rate to just 64%. At that rate, Boeing’s next offer will be a 45% pay raise and will be accepted with just 33% of the union objecting. Meanwhile, the governors of Montana, Missouri, and Utah all got together to urge a settlement somehow, as the downstream effects were hitting their states hard.
The “Revolving Door” Effect
It will come as a surprise to no one that Boeing has lobbyists. But some believe that, perhaps, this is going a bit too far, as Boeing may be taking advantage of what the Seattle Times called the “revolving door” effect to gain an edge with regulators in a market where that may not be the best outcome for passengers.
The “revolving door” effect essentially describes Boeing’s efforts to hire former government officials who knew the ins and outs of policy and had personal contacts within agencies that could be used to help Boeing. Those who condemn the “revolving door” effect believe it weakens regulation and enforcement, which leads to less stringent oversight to protect the chance at a lucrative future career.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, six Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 16.52% loss in its share price over the past year, the average BA price target of $195.57 per share implies 25.29% upside potential.
