If the last few weeks have not yet produced enough bad news for aerospace company Boeing (BA), then today will add to the list. Boeing just lost the CEO of its satellite-making subsidiary, and that was enough to send shares down a little over 1.5% in Wednesday afternoon’s trading.
Jason Kim has held the position at Millennium Space Systems for the last four years. But now, Kim is out, and Boeing is left looking for its second new CEO in as many months. Boeing picked up Millennium Space Systems back in 2018, and it has delivered some impressive wins accordingly, including new contracts with the Department of Defense in the U.S.
As to why Kim is departing, a report from TechCrunch said that, basically, no one knew except Kim himself, and he was not talking. By the end, Kim had improved Millennium Space Systems to the point it could support nearly 1,000 workers, which made it a pretty substantial operation.
Other Operations, Meanwhile, are Faltering
That was not the end of the bad news for Boeing today; Boeing’s ongoing issues in getting planes put together and out the door are proving a particular problem, not just for Boeing but for its customers. We know that Ryanair recently had complaints about Boeing’s ability to get planes into customers’ hands, but Ethiopian Airlines is also having similar concerns. In fact, Ethiopian Airlines is now leasing aircraft in order to keep pace with its previously-launched expansion efforts.
Meanwhile, China’s plans for aircraft are surging ahead, but can Boeing ever keep up? Over the next 20 years, Boeing noted, China will need 8,830 new planes. That means close to 37 planes a month, every month, for the next 20 years. Given that as of July 10, Boeing was still operating under a cap of 38 planes, it is technically possible that Boeing could fill those orders. If it does absolutely nothing else, that is, and that would be a move that is certain to leave its other customers furious.
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, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 25% loss in its share price over the past year, the average BA price target of $216.59 per share implies 26.83% upside potential.
