Boeing Faces Turbulence: Stock Drops Amid Crash Concerns

Boeing ( (BA) ) has fallen by -7.90%. Read on to learn why.

Boeing’s stock has experienced a significant decline of 7.90% over the past week, largely due to a tragic crash involving an Air India flight operated by a Boeing 787 Dreamliner. This incident has cast a shadow over the company’s reputation, despite the aircraft’s previously strong safety record. The crash, which occurred shortly after takeoff from Ahmedabad, India, resulted in the loss of more than 240 lives. While the exact cause of the crash remains under investigation, initial reports suggest that engine thrust issues may have played a role, although a bird strike and overloading have been ruled out.

The market reaction to the crash has been mixed. While some investors view the stock’s decline as an overreaction given the Dreamliner’s robust safety history, others are cautious, noting Boeing’s heightened sensitivity to negative news due to past incidents involving its 737 Max aircraft. Analysts like Kristine Liwag from Morgan Stanley have maintained a neutral stance on Boeing, assigning an Equal-weight rating with a $200 price target. Despite the recent dip, the overall analyst consensus remains bullish, with a Strong Buy rating and a price target suggesting a potential upside of over 10% in the next year.

In response to the crash, Boeing’s CEO canceled his appearance at the upcoming Paris Airshow, and GE Aerospace, which manufactures the plane’s engines, postponed its Investor Day. The U.S. Transportation Secretary and the FAA have stated that there is no current data suggesting a need to ground 787 flights domestically. However, a team from the U.S. will assist in the investigation led by Indian authorities. As the investigation unfolds, Boeing’s stock performance will likely remain under scrutiny, with investors keenly watching for any developments that could impact the company’s future prospects.