So remember a while back when aerospace stock Boeing (BA) found some issues with cabin radios in their aircraft? The kind of errors that unexpectedly cut out signals from air traffic control? Boeing was quick on the draw, and got out a fix…but the fix did not go as planned. Despite this, Boeing shares blasted up over 14% in Wednesday afternoon’s trading, mostly on plans to halt some tariffs.
The Federal Aviation Administration (FAA), who had already been keeping an eye on Boeing in the form of production caps, got reports about Very High Frequency (VHF) radio signals that were not reaching the flight deck on Boeing flights. Why? Because the radios were switching between active and standby modes, and often without any kind of input from the flight deck itself.
Boeing in turn launched a patch designed to keep the radios from shutting themselves down, and the FAA in turn called for airlines to provide feedback on the patch’s effectiveness by April 14. But Qatar Airways noted that the patch turned out to be not particularly useful. The radios are still switching between active and standby without any input from the flight deck.
A “Corporate Handout Addiction”
Boeing is also facing another major problem right now: the growing concern that Boeing is basically just in it for free government handouts. A report from The Urbanist calls for Boeing to be brought to task for its “corporate handout addiction,” pointing out that, while it accepts billions of dollars in tax breaks from Washington state, it still lays off workers, making its value as a jobs provider in the region limited.
This is different from the Boeing of the past, who once, the report noted, took to a zoning meeting to allow housing construction near the Everett plant just to be sure workers had places to live. But then, as many other reports pointed out, Boeing’s culture changes about the time it merged with McDonnell Douglas back in 1997. Cash flow became king, and Boeing’s focus on quality declined significantly, leading to the situations we see today.
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 12 Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 9.54% loss in its share price over the past year, the average BA price target of $195.87 per share implies 23.58% upside potential.
