The strike at aerospace giant Boeing (BA) continues, and now, there is about to be some new fallout. A report from the Financial Times suggests that, if there is no resolution to the strike within the next three weeks, furloughs will start at Spirit AeroSystems (SPR). Yet the news did not dampen investors’ spirits any, and shares were up over 2% in Thursday afternoon’s trading.
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While the news seemed rather stark, Spirit itself came out to say that no such decisions had been made. Though Spirit insisted that it “…continue(s) close coordination with Boeing,” and “..no decisions have been made at this time,” the remark rings somewhat hollow considering that Spirit is supplying Boeing with parts. Without production at Boeing, then what point to the parts? Yes, there is room to build a backlog, but you can only do so much in that vein for so long.
This point was not lost on Spirit. While some disputed the exact timing—particularly that three-week timeline—the idea of Spirit shutting down alongside Boeing is not out of the question. Eventually, without Boeing processes to supply, there would be little point in Spirit continuing.
When Another Wheel Fell Off
As if Boeing did not have trouble enough already, along came news of a whole different stripe. A Boeing 737 landed in Argentina, but after coming to a stop, the left-side rear wheel fell completely off.
There were no injuries. The plane was on the ground and each landing gear has two wheels, so any impact of just one lost wheel was minimal. Still, this is exactly the kind of thing that Boeing does not need right now. Meanwhile, the cause of the accident is under investigation.
Is BA Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, four Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 20.3% loss in its share price over the past year, the average BA price target of $210.79 per share implies 35.7% upside potential.
