Boeing Stock: More Turbulence, Starliner Launch, and a Mega Air Force Contract
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Boeing Stock: More Turbulence, Starliner Launch, and a Mega Air Force Contract

Story Highlights

Boeing’s brand sentiment is taking a hit following a second turbulence incident on a flight. Meanwhile, the company is going ahead with the launch of its Starline spacecraft despite a helium leak.

Boeing (NYSE:BA) is facing turbulence on the ground as well as in the skies. Still, a new Air Force contract worth billions and the much-awaited upcoming launch of its Starliner spacecraft promise to offer relief (however minor it may be) to investors in the troubled plane maker.

Turbulence in the Skies

To start off, another BA plane was hit by turbulence yesterday. This is the second such incident in a week’s span for the company. The incident involved a Qatar Airways flight from Doha to Dublin. Nearly a dozen people aboard the 787 Dreamliner were injured. Earlier, a Singapore Airlines flight from London to Singapore was hit by severe turbulence. Notably, the incident took place within an Intertropical Convergence Zone, known for heavy thunderstorms.

Starliner Launch

Meanwhile, the inaugural crewed flight of Boeing’s Starliner spacecraft is coming up on June 1. Earlier reports indicated that the flight was “Indefinitely” delayed owing to glitches. However, Boeing and NASA are getting ready to carry out the launch on June 1 without fixing a helium leak. The leak had come to light during a previous launch attempt. Boeing had secured the NASA contract to ferry astronauts to space in 2014. However, the project has been mired with delays.

A Mega Contract

Amid these hits-and-misses, an Air Force contract, worth $7.5 billion, promises to offer some solace to Boeing’s shareholders. Boeing’s defense unit has bagged the contract for JDAM (Joint Direct Attack Munition). The company will supply tail kits, spares, and laser JDAM sensor kits under the contract, which runs until February 2030.

Sentiment Running Low

Still, and as one would expect, the Boeing brand is taking a hit. In the aftermath of the Qatar Airways turbulence incident, sentiments around the Boeing brand have plunged, according to CARMA, a media intelligence company.

Additionally, expectations of a negative free cash flow this year and a slower pace of production are not helping investor sentiment in the company either. In Q1, Boeing’s plane deliveries fell to their lowest level since the COVID-19 pandemic.

What Is the Target Price for BA Stock?

It’s not surprising then that Boeing’s stock price is also facing turbulence, with a year-to-date decline of nearly 33%. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average BA price target of $219.57.

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