Today is a grim day for Boeing (BA) as it faces the possibility of its first strike in nearly two decades. With a contract offer on the table that falls somewhat short of what was expected, it seems increasingly likely that a strike will go through. Investors are confident, though, and shares gained fractionally in the closing minutes of Thursday’s trading.
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New CEO Robert “Kelly” Ortberg, in a move that might not win him many friends, delivered an impassioned plea to workers to not go on strike. Ortberg called for workers “…not to sacrifice the opportunity to secure our future together because of the frustrations of the past.” Ortberg further called on workers to “…choose the bright future ahead,” though he acknowledged “…there are employees considering another path—and it’s one where no one wins.”
Such a strike would come at a terrible time for Boeing. With mounting debt and cash flow milestones getting pushed back, it would only mean trouble for Boeing, as well as airlines, who have been waiting months, if not years, for orders to get filled.
NASA Plans to Stick with Boeing
After the rolling calamity that was Starliner, from its delayed launches to its ignominious return to its left-behind astronauts waiting for a ride home from the biggest competitor, it would be easy to think that Boeing might be persona non grata at NASA. That is not the case, though, and NASA is still looking to Boeing for the future of space travel.
The problem is that NASA does not want a single-source solution. This makes a certain amount of sense; after all, Boeing just got its skin saved by SpaceX. Who would step in to save SpaceX if, in the future, it had a Boeing moment of its own? Reasonable, certainly, and a reason to develop another supplier. And though Boeing does not look the best right now, it could become better in the future.
Is Boeing a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, four Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 21.87% loss in its share price over the past year, the average BA price target of $213.67 per share implies 31.13% upside potential.
