Oh, we knew that the Starliner program was a disaster on a bun for aerospace stock Boeing (BA). The fact that its astronauts are literally still in space, and have been there since last June, makes it abundantly clear. And the numbers have come back as well, which served as bad news enough for shareholders to send Boeing shares down fractionally in Tuesday afternoon’s trading.
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Multiple reports note that Boeing lost half a billion dollars, and then some, on Starliner in 2024 alone. That by itself would be bad news, but considering that the life of the project goes back to 2018, the total bill for the boondoggle is now a little over $2 billion. And the losses may not be finished yet, as a risk “…remains that we may record additional losses in future periods.”
Just in 2024, according to Boeing’s released 10-K annual filing, Boeing dropped $523 million on Starliner, thanks to “schedule delays and higher testing and certification costs….” Boeing also pointed to “…higher costs for post-certification missions.” In fact, this represented a new record for Starliner costs; the last time costs were this high was back in 2019, when it took a $489 million charge on it that year.
Making It Back in Planes
While those losses are substantial, there is some positive to consider here. Riyadh Air, reports note, is looking to pick up a good slug of extra aircraft. In fact, it is looking for about 50 new widebodies to come into the Riyadh Air fleet. Boeing is in the running for at least some of that order, and not surprisingly, so too is immediate competitor Airbus (EADSF).
However, there are issues on both sides. Boeing is still trying to get the new 777 up and running—not to mention certified—and Airbus is having some trouble with engine performance issues, particularly in hot climates, like the one Riyadh is located in. Those tend to require more maintenance, and Riyadh Air may not want to deliberately sign up for higher repair costs.
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 14 Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 15.48% loss in its share price over the past year, the average BA price target of $196.06 per share implies 11.68% upside potential.
