Boeing Stock Slumps Again; Time to Buy or Throw in the Towel?
Key PointsAchieving management's targets could yield strong returns by 2029.
Boeing (BA) shares continued their downward trend, with another double-digit decline recently disappointing investors. Management presented unfavorable projections on production targets for the narrow-body 737 MAX and free cash flow (FCF) guidance. Analysts subsequently adjusted their price targets accordingly. However, despite the gloomy news, some investors argue this could be an opportune moment to purchase the stock, provided one can tolerate potential fluctuations.
Management's initial plan was to increase the 737 MAX production from 42 units per month to 47 by summer, but this was later adjusted to a more cautious 52 units per month by year-end. The delay in meeting these projections has negatively impacted Free Cash Flow expectations. Furthermore, the company's progress in certifying the 777X and delivering the 737 MAX units is critical to improving cash flow, as delays could tie up significant resources in undelivered aircraft.
Despite the challenges, Boeing still holds a solid case for investment. If the company achieves its $10 billion FCF target by 2029, the stock could potentially reach $252 per share, representing a 14.4% annual return. However, this would require successful certification and timely deliveries of the 777X and 737 MAX. The production rates forecasted for these aircraft in 2029 and 2027, respectively, seem conservative according to analysts.
With a substantial backlog of $745 billion, Boeing presents an attractive opportunity for investors if they can stick to their production targets.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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