It will likely come as no surprise that aerospace stock Boeing Co. (BA) continues to face down a strike after a machinist union rebuffed management’s “best and final” offer. The revelation did no good for Boeing’s share price, which lost 2.5% in Monday afternoon trading.
The final offer from Boeing featured a 30% hike in wages, though it would take four years to get there, largely ensuring that inflation would eat the bottom out of that wage gain before all was said and done. But a $6,000 ratification bonus would also be included, as would a return to performance bonuses and a 100% match on 401(k) contributions up to 8% of each employees’ wages.
Originally, Boeing called for a deadline of September 27 to vote on the new agreement, but ultimately backed off that demand, instead offering a much more sedate call for a vote “as soon as possible.” Given that the strike has cost Boeing about $500 million in lost revenue so far, it is a safe bet that management will present a new best offer to the union in the very near future.
Suppliers Starting to Sweat
While Boeing’s strike continues, and production is hampered, a report from Reuters suggests that there is a lot of concern about the strike upstream as Boeing’s suppliers start to wonder how much longer they will have their own jobs in the face of this prolonged strike.
One such supplier, Pathfinder Manufacturing, has already put 14 of its 54 total employees on furlough, and more furloughs may be coming if Boeing does not settle this strike in short order. Also, a machinists job training program offered to high school students has been put at risk because of the ongoing strike. Given that this is a sector hungry for skilled workers, the threat to the high school training program represents a punch to the future itself.
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 15 Buy and three Hold ratings assigned in the past three months, as indicated by the graphic below. After a 18.92% loss in its share price over the past year, the average BA price target of $210.79 per share implies 39.02% upside potential.
