Just days ago, it looked like Boeing (BA) might be able to avert its first strike in decades. But new reports emerged suggesting that the last-minute offer will not go over well with the union after all, and a strike is likely to follow. Boeing shares slid nearly 3% in Tuesday afternoon’s trading as a result.
While Boeing brought out an offer for the union just yesterday, there was always a chance that the union would ultimately reject Boeing’s proposal. After all, Boeing’s plan to raise wages by 25% over the next four years was significantly short of the union’s desire for a 40% hike in that same time frame. Though the union did win several concessions, including assurances that new aircraft would be built in the Pacific Northwest, there were still gaps between the two sides.
This prompted the union president, Jon Holden, to note, “The response from people is, it’s not good enough.” And that, in turn, may lead to Boeing getting its contract rejected. However, it is easy to wonder how far the union can go, given the cash crunch Boeing is right now. Indeed, Boeing has already delayed its goal of generating $10 billion in free cash flow to 2026.
More Space Plans
In other news, we have to give Boeing credit for getting right back on the horse. While its Starliner project has mostly ended—its astronauts are still in the International Space Station and will remain there until early 2025—it will not allow this setback to stop it altogether. In fact, Boeing is working to bring quantum computing to space.
The firm plans to launch a small satellite into orbit in 2026 that will provide some of the basics to establish a “quantum internet,” noted a report in Spacenews. A microwave satellite known as the Q45 will demonstrate “quantum entanglement principles,” a kind of communications technology that allows information to be transferred between particles from a distance. Should it work, it may be the foundation of a whole new long-range communications platform.
Is Boeing a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 13 Buys, four Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 25.07% loss in its share price over the past year, the average BA price target of $212.71 per share implies 33.67% upside potential.
