Boeing (BA) stock forecast: What’s next after negative earnings?
Boeing stock value declined 5% following the release of the company’s financial results for the fourth quarter and 2021 fiscal year. Losses per share for Q4 came in higher than analysts had expected.
For the three months ending 30 December, the Chicago-based aircraft manufacturer reported total revenue of $14.8bn. The market’s consensus forecast was $16.7bn. Adjusted losses per share landed at $7.69, missing Wall Street’s consensus estimate of $0.03 a share.
How could this report affect the Boeing stock price outlook? In this article, we assess BA stock price action, the company’s fundamentals and most recent Boeing stock news to draft plausible scenarios for the future.
Boeing stock analysis: Price drivers and technical views
After an encouraging jump in November 2020 on the back of Pfizer’s vaccine for Covid-19, Boeing peaked at around $278 a share. The price then went down as both the Delta and Omicron variants of the virus increased concerns about the possibility of an enduring negative environment for airlines.
Even though demand for new aircraft has started to pick up, data from the International Air Transport Association (IATA) for November 2021 indicated that load factors went down 24% compared to the same period in pre-pandemic 2019, while capacity declined 65.3% compared to that same period.
The report continued: “This suggests that the traditionally less busy January-February period will be weaker than in the absence of Omicron.”
The appearance of Omicron seems to be prolonging the industry’s woes. Aircraft manufacturers are among the most affected as demand for new planes could continue to be below pre-pandemic levels until these virus-related uncertainties dissipate.
Since the year began, the Boeing stock market price is down by more than 3%. That’s on top of the 6% loss the stock experienced in 2021. The price action tagged the $192 horizontal support amid the post-earnings decline. A drop below this level may lead to the closing of the November 2020 price gap, which could accelerate the downtrend for Boeing.
Meanwhile, momentum indicators continue to favour a bearish short-term BA share price forecas. The relative strength index (RSI) was standing at 36 (bearish), while the moving average convergence divergence (MACD) has moved to negative territory and crossed below the signal line, as of 31 January 2022.
Boeing fundamental analysis: Latest earnings
Boeing reported financial results covering the fourth quarter and full 2021 fiscal year on 26 January. Revenues for the three months ending 30 December came in at $14.8bn, resulting in a 3% drop compared to the same period a year ago. Meanwhile, GAAP operating losses stood at $4.2bn. This figure is an improvement on the $8bn the company lost in Q4 2020.
For the 2021 fiscal year, Boeing’s revenues rose 7% to $62.3bn. Total GAAP operating losses were at $2.9bn. A $12.8bn loss was reported in 2020.
The company reported a $4.4bn cash burn in 2021. But the fourth quarter marked an interesting turnaround. Boeing managed to generate $494m in positive free cash flows for the first time since the pandemic started.
Cash and marketable securities by the period’s end stood at $16.2bn, while the company’s consolidated debt closed the quarter at $58.1bn. Boeing reported total assets of $138.6bn.
Negative equity stood at $14.8bn. Total debt continues to exceed the company’s assets.
The fact that Boeing reported positive free cash flows this quarter appears to be encouraging. The company could stop burning cash moving forward, which could open up the possibility of using some of its cash reserves to pay off a portion of long-term debt.
Boeing stock projections: Analyst sentiment
The consensus recommendation for Boeing stock, as compiled by MarketBeat, was bullish, with 12 of 18 analysts holding a ‘buy’ rating, as of 31 January. Six analysts gave ‘hold recommendations’.
The average BA stock price target was at $263.83 a share, resulting in a potential 38% upside from its last closing price of $190.57 (as of 28 January). The highest estimate from analysts stood at $306 and the lowest at $220.
Analysts’ ratings in January were a bit mixed. Cowen raised its price target to $265 from $250. Citigroup reduced its 12-month BA stock forecast from $240 to $238.
Following the latest earnings report, some analysts changed their Boeing stock projections. Kristine Liwag of Morgan Stanley boosted the BA stock price target from $274 to $288, while Wells Fargo lowered its estimate from $272 to $250.
Commenting on Boeing stock price future performance, Mikhail Karkhalev, analyst at Capital.com, said:
Boeing (BA) stock forecast: Targets beyond 2022
Meanwhile, algorithm-based forecasting services gave mixed Boeing stock predictions for 2022, 2025 and the next 5 years, as of 31 January.
Wallet Investor predicted that the price could decline to $176.551 by 2 February 2022, $145.078 by the end of December 2022 and collapse to $0 by the end of 2025.
Gov Capital predicted that the stock could move up to $198.950 by the end of February 2022. The service expected a slight decline to $172.672 by the end of the year, but sees the price rising to $387.721 by the end of 2023 and $1,148.512 by the end of 2025. Although Gov Capital didn’t share price targets for 2030, its 5-year Boeing stock forecast suggested the stock could hit $1,849.349 in February 2027.
These predictions are based on an assessment of the Boeing historical stock price. They should not be taken as a recommendation to buy or sell the stock. Past performance is no guarantee of future results. Stock prices can go down as well as up. It’s important to bear in mind that analysts’ forecasts can be wrong.
Do your own research and always remember your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose.
FAQs
Is Boeing a good stock to buy?
Boeing is a company with a strong business model, brand, and operating capacity. However, the company’s finances were heavily embattled by the pandemic and its long-term debt has significantly increased. Whether BA is a suitable investment depends on your own investment objectives and research. Remember, it’s important to reach your own conclusion about the company’s prospects and likelihood of achieving analysts’ targets.
Boeing stock: buy, sell or hold?
The consensus recommendation from 18 analysts surveyed by MarketBeat, as of 31 January, was ‘buy’, while the average price target for Boeing stock stood at $263.83 a share.
Why has the Boeing stock price been going down?
The price of Boeing stock has been declining since November 2021 as the appearance of the Omicron variant of the Covid-19 virus threatens to disrupt the airline industry’s operations for longer than expected.
Will Boeing stock go up or down?
There were conflicting views about the short-term and long-term outlooks for Boeing stock, as of 31 January. Investors should do their own research to form an opinion on the future of Boeing stock before investing.
Does Boeing pay dividends?
Boeing does not pay dividends. The Board of Directors suspended distributions in 2020.
Markets in this article
