It never rains but rather pours when it comes to aerospace company Boeing (NYSE:BA). Today’s news was a litany of horrors, and from regulatory issues to earnings projections, nothing went well at all. Investors agreed and sent shares down fractionally in Thursday afternoon’s trading.
The government delivered a couple hammer blows to Boeing just recently; first, Boeing stepped up to defend itself against the Justice Department, which alleged that Boeing did not hold up its end of a deferred prosecution agreement set up back in 2021. Boeing, however, asserts that it did indeed uphold said agreement, which called for Boeing to pay $2.5 billion and follow a set of “stipulations” the government set forth.
That, in turn, would see a fraud conspiracy charge dropped this year, and the three years are up in just weeks, in July. Nevertheless, the government noted Boeing had not established a framework to track and address “…violations of U.S fraud laws throughout its operations.”
Boeing Investigating a New Quality Issue
That’s bad enough, but now, Boeing is investigating a new quality issue – the fasteners on the fuselages have not been installed correctly. This comes after the Federal Aviation Administration (FAA) noted that its oversight processes of Boeing were “…too hands-off…” ahead of the 737 MAX 9 incident that kicked off this whole mess.
Further, the FAA said that there would be significantly more oversight in the future. And just to round out the whole rolling disaster, Bank of America, via analyst Ronald Epstein, revealed that Boeing’s earnings—and free cash flow—would be less than expected for the next several years, as it’s going to take a while to increase deliveries.
It’s worth noting that Epstein is a top-rated analyst with an overall 61% success rate and an average return of 9.2% per rating.
Is Boeing a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 17 Buys, seven Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 16.59% loss in its share price over the past year, the average BA price target of $216.30 per share implies 19.48% upside potential.
