As Boeing (NYSE:BA) struggles to put out various fires, it’s now staring down a new problem: the looming legal threat of a criminal prosecution linked to an old skeleton in its closet.
Boeing’s Latest Trouble
The U.S. Department of Justice (DOJ) has stated that the aerospace giant violated a deferred prosecution agreement related to two fatal 737 Max crashes nearly five years ago. According to Bloomberg, the company breached the $2.5 billion agreement by failing to set up a compliance and ethics mechanism to prevent violations of U.S. fraud norms in its operations.
Boeing now has approximately four weeks to present its response to the DOJ. Meanwhile, the DOJ is still determining its next steps and deciding whether to penalize the airplane maker. According to the Wall Street Journal, a conviction could impact Boeing’s status as a government contractor.
Comes on Top of Multiple Challenges
Importantly, this development further adds to Boeing’s recent troubles, including mishaps with its planes (from a fuselage panel blowing off to plane tires dropping from the skies). In recent times, some Boeing whistleblowers have died mysteriously. In April, the company’s deliveries hit a new low not seen in two years, and it’s also under scrutiny from both the FAA and the SEC.
Meanwhile, Boeing’s Starliner program is set for another test on May 21. Last week, the inaugural crewed flight for Boeing’s Starliner spacecraft was delayed owing to an issue with the Atlas V rocket that was supposed to take the ship into orbit. A successful flight on May 21 would mark the first instance (and, may I add, a welcome departure from its recent troubles) of Boeing’s spacecraft transporting people to space.
What Is the Target Price for BA Stock?
Boeing’s share price has tanked by nearly 31% so far this year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average BA price target of $222.48.
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