Below is a graph of truly excessive debt for a zero sales-growth business in 2021-22. Canada will decide between buying Gripen fighters from Saab (OTC:SAABY) or returning to its first choice, Lockheed Martin's F-35. Typically during recessionary periods, passenger airline traffic and demand for new planes plummets, leading to horrible operating performance for the company. The classic definition says an official inversion appears when 3-months are higher than 30-years, which just occurred in November. Why Shares of Boeing Fell in February | The Motley Fool YCharts - Boeing Leverage Ratios, Since 1990. This website is using a security service to protect itself from online attacks. *Average returns of all recommendations since inception. Why Boeing Stock Keeps Going Down | The Motley Fool 15.204.210.172 Beginning on 13 May 2019, the yield curve on U.S. Treasury securities inverted, [1] and remained so until 11 October 2019, when it reverted to normal. Boeing's Q4 2020 Results And 2021 Outlook Signal Inevitable Pullback Boeing has seen its order book fall during in 2020, and is cutting production of all commercial models. Prior to the grounding, Boeing had hoped to be manufacturing more than 50 MAX planes per month by now. are being fixed, and total sales will zigzag in the right direction following the COVID-19 pandemic-related decimation in new plane demand. Transportation Earnings Report Airbus Posts Heavy Loss Despite Rival Boeing's 737 MAX Crisis, and the Stock Is Falling By Callum Keown Feb. 13, 2020 1:47 pm ET Order Reprints Print Article. The author undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional materials. Cost basis and return based on previous market day close. The Motley Fool has no position in any of the stocks mentioned. But because the purchase of 65 F-35s might cost as much as $30 billion, Canada has been considering other options, including buying upgraded F/A-18 fighters from Boeing, or other models from . Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. By accessing this page, you agree to the following Any projections, market outlooks or estimates herein are forward looking statements and are based upon certain assumptions and should not be construed to be indicative of actual events that will occur. The US planemaker, which had already announced deep cuts, said its staff would be down to just 130,000 by the end of next. So, if a recession is coming, do you want to own a deep cyclical, capital-spending dependent Boeing? That in turn could eat into long-term demand for new aircraft, or at least temporarily stunt the growth of Boeing's order book. It's been a difficult few years for Boeing, with the company plagued first by 737 MAX design flaws that led to two fatal crashes and an 18-month grounding of the jets, and then by the pandemic, which caused airlines to dramatically scale back their growth plans. If you have an ad-blocker enabled you may be blocked from proceeding. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. With less than an hour to go in the trading day, as of 3:20 p.m. I have written a number of articles since August, discussing past instances of Treasury yield-curve inversions creating future pain for the economy. Is Boeing Stock A Sell? StockCharts.com - Boeing, 18 Months of Daily Price and Volume Changes. Bjorns Corner: Why e in ePlane shall stand for environment, Part 13. Lets look at Boeings trading history during the previous four recessions over the last 32 years. Rich Smith has no position in any of the stocks mentioned. The information and data in this article are obtained from sources believed to be reliable, but their accuracy and completeness are not guaranteed. Learn More. Invest better with The Motley Fool. They may delay existing orders, and if travel demand dives lower, airlines may cancel previously booked production orders altogether. The Biden frauds are so dishonest that they even stopped providing data on the M2 money supply. YCharts - Boeing, EV to Trailing 12-Month EBITDA and Revenues, Since 2015. Past performance is no guarantee of future returns. That wasn't how today was supposed to go. "COVID-19 case rates continue to be high and travel restrictions remain in place, putting significant pressure on passenger traffic. Boeing down sharply second day in a row. Airbus stock in similar Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. This is a huge disappointment for Boeing, whose commercial division is still languishing in unprofitability, leaving the company's defense, space, and security division to provide the bulk of its profits. Shares of aerospace giant and certified blue chip stock Boeing (BA -0.24%) are looking more red than blue (or green) today. Investors responded by hitting the "eject" button,. Now, it appears this division will miss out on a chance to sell Canada as many as 88 fighter jets. That should help the company, which bled through more than $15 billion in the first nine months of 2020, to stem losses and increase the cash coming in. The ultimate insider (CEO) bought $4 million of BA at about $160 per share recently. Needless to say, further increases in the share quote appear unwarranted if a recession becomes reality soon. Learn More. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Market-beating stocks from our award-winning analyst team. Please disable your ad-blocker and refresh. Rich Smith has no position in any of the stocks mentioned. Shares of Boeing Co. dropped 0.24% to $212.10 Friday, on what proved to be an all-around grim trading session for the stock market, with the S&P 500 Index. In my mind, an investment in Boeing requires too much faith and hope, ignoring truth and consequences. The recertification gives Boeing the green light to begin moving the more than 400 planes built but not delivered during the grounding. Boeing's stock price plunged by as much as 5.6% on Tuesday. The company's debt ballooned during the pandemic, and it desperately needs cash flowing in from plane sales to bolster its balance sheet. The second 737 Max crash occurred in March 2019. Q: "Philosophically speaking is a business worth owning if it lacks these three value-creating characteristics?". Nationally ranked stock picker for 30 years. The technical trading picture is not much help for the bullish argument either. The firm was forced to halt production of the aircraft, which had more than 4,000 orders after two plane crashes. Heck you should start a list of the large companies that have massive amounts of debt. Boeing Stock Eyes Exit From Survival Mode To help preserve cash, Boeing suspended its dividend on March 20, 2020. Maybe it's time to sell?". Cloudflare Ray ID: 7e3ee1cf3c605a22 February was a tough month for airline stocks, with the sector battered by fears that the coronavirus would cut into demand and negate any growth the airlines had hoped for in 2020. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Todays inversion could be a reason for bullishness on long bonds here, while projecting a lower Dow Jones Industrial Average in early 2023 and S&P 500 Index over time here. On 20 February 2020, stock markets across the world suddenly crashed after growing instability due to the COVID-19 pandemic. Why Boeing Stock Dropped Today | The Motley Fool Market-beating stocks from our award-winning analyst team. If anything, I am more bearish now, keeping my Sell rating for the next 12-month investor outlook. To make the world smarter, happier, and richer. Any and all opinions, estimates, and conclusions are based on the author's best judgment at the time of publication, and are subject to change without notice. Boeing Stock Crashes to 52-Week Low Following Shocking Report on 737 The pandemic order cancellation excuse has severely weakened Boeings financials, as management decided to go deep into debt in 2020 to keep its doors open and supplier/worker payments up to date. Dow tumbles on red-hot US job market report | CNN Business All opinions expressed herein are not investment recommendations, and are not meant to be relied upon in investment decisions. To the contrary, as I pen these words, it actually seems the Dow is up a few points. Here is a Long term chart showing that. Investors responded by hitting the "eject" button, sending Boeing shares down as much as 9% in morning trading. Worst is behind BA and earnings, FCF and book value will all be improving in 2023. It's stock price has already been obliterated. First, Barron's reports today that S&P Ratings just downgraded Boeing's credit rating two notches to "BBB" -- letters that don't mean much to most investors, but that tell lenders that Boeing debt is now just a couple points away from being turned into junk bonds. Of course, thats the present Wall Street forecast for 2023-24 decent growth. Boeing also confirmed reports that it will not begin making the first deliveries of the new version of its 777 widebody aircraft until 2025, nearly five years later than the company's original target. To make the world smarter, happier, and richer. Mr. Franke was ranked #1 in the Motley Fool CAPS stock picking contest during parts of 2008 and 2009, out of 60,000+ portfolios. The Motley Fool has a disclosure policy. A Boeing F/A-18. The Motley Fool has a disclosure policy. Mr. Franke was Editor and Publisher of the Maverick Investor newsletter during the 1990s, widely quoted by CNBC, Barrons, the Washington Post and Investors Business Daily. And most of the major averages are showing signs of turning back down here. Paul was consistently ranked among top investment advisors nationally for stock market and commodity macro views by Timer Digest during the 1990s. I wrote a bearish article on the company in April 2021 here, when price was at $244 vs. $183 today. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Stock Advisor list price is $199 per year. "As airlines try to cope with their own huge financial losses, they are now deferring orders and delaying deliveries of new planes. *Average returns of all recommendations since inception. Great info. Boeing 737 Max can fly again: Key level to watch in the stock Really, the only way to value Boeing today is on sales (Price or EV to Revenues), which is near a modern-record high in December 2022. Airbus stock in similar decline. The 737 MAX was grounded in March 2019 after a second fatal accident involving the plane. The $11.9 billion dollar net loss is the largest in the aerospace giant's more than 100-year history and a big part of the reason is the coronavirus pandemic. Airbus Soars Past Boeing at the Paris Air Show, Why It Makes No Sense to Invest in the Airline Industry (and Why Boeing and General Electric Investors Will Do It Anyway), 3 Changes to Social Security You Probably Didn't Know, 4 Unequaled Growth Stocks You'll Regret Not Buying in the Wake of the Nasdaq Bear Market Dip, 2 Top Artificial Intelligence Stocks to Buy in July, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Returns as of 07/09/2023. Heard in context, West's remarks seemed to point only to the potential need for more cash if and when production numbers pick up, which would necessarily mean that Boeing must have cash to buy more parts to build more planes and thus arguably be good news for Boeing. I am not receiving compensation for it (other than from Seeking Alpha). Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Mr. Franke suggests investors use 10% or 20% stop-loss levels on individual choices and a diversified approach of owning at least 50 well positioned favorites to achieve regular stock market outperformance. Making the world smarter, happier, and richer. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. And then there's the 737 Max, a plane that Boeing had staked its future on as it became the best-selling commercial jet in the company's history before two crashes, five months apart, that killed 346 people.Wednesday the European Union's aviation safety agency became the latest to approve fixes and design changes to a flawed automated flight control system that investigators say played a major role in causing the crashes, and the agency will allow the troubled jet to return to passenger service. Boeing's stock fell sharply for a second straight day as more nations and airlines grounded the company's 737 MAX 8 planes. Boeing has already endured a reputational and financial hit due to the 737 MAX crisis. *Average returns of all recommendations since inception. This introduces a ton of risk for BA. You can email the site owner to let them know you were blocked. And Calhoun doesn't expect demand to bounce back any time soon. *Average returns of all recommendations since inception. No U.S. airlines expect the planes to fly commercially until next year. Boeing Co Stock Price History | Historical BA Company Stock Prices That's a very good thing," he says. Invest better with The Motley Fool. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Discounted offers are only available to new members. Here are three reasons why Boeing stock is in even worse shape than the Dow. Airbus Soars Past Boeing at the Paris Air Show, Why It Makes No Sense to Invest in the Airline Industry (and Why Boeing and General Electric Investors Will Do It Anyway), Cumulative Growth of a $10,000 Investment in Stock Advisor, Join Over Half a 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, revealed a lot of embarrassing details about internal operations, Copyright, Trademark and Patent Information. There's more to real news than a news release. YCharts - Boeing, Revenue vs. Interest Expense Data, Since 2009. The coming recession won't drag it down further than it already has been. Cost basis and return based on previous market day close. YCharts - Boeing, Trailing 12-Month Free Cash Flow, Since 1992. Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. It is trading on FCF which will be huge in 2023. While their debt is clearly substantial, the biggest difference between now and previous recessions is Boeings production backlog. Part 20. Invest better with The Motley Fool. Combined, this would be a big chunk of change supporting Boeing on both its costs side and its demand side (because those airlines would presumably turn around and hand some of their money over to Boeing to buy planes). The impact of the coronavirus outbreak on travel is not likely to be as significant of a headwind for Boeing, but it's still another issue for new CEO Dave Calhoun to juggle. To make the world smarter, happier, and richer. *Average returns of all recommendations since inception. Philosophically speaking is a business worth owning if it lacks these three value-creating characteristics?". Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. This is an important moment for Boeing, but investors should be careful not to get ahead of themselves. Airbus Soars Past Boeing at the Paris Air Show, Why It Makes No Sense to Invest in the Airline Industry (and Why Boeing and General Electric Investors Will Do It Anyway), Cumulative Growth of a $10,000 Investment in Stock Advisor, Join Over Half a 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Boeing has also had a slew of other design and production problems with the 787 Dreamliner and the KC-46 midair refueling tanker for the Air Force. Why Shares of Boeing Lost Nearly Half Their Value in March Shares of Boeing (BA -0.24%) fell out of bed Friday, dropping 6.5% by 9:40 a.m. Shares of Boeing (BA -0.24%) climbed 5.9% in pre-market trading Wednesday after the Federal Aviation Administration cleared the company's troubled 737 MAX to return to service. Your email address will not be published. Boeing's 2020 aircraft cancellations worst on record, despite - CNBC Airbus Soars Past Boeing at the Paris Air Show, Why It Makes No Sense to Invest in the Airline Industry (and Why Boeing and General Electric Investors Will Do It Anyway), 3 Changes to Social Security You Probably Didn't Know, 4 Unequaled Growth Stocks You'll Regret Not Buying in the Wake of the Nasdaq Bear Market Dip, 2 Top Artificial Intelligence Stocks to Buy in July, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. The aerospace giant delivered 18 more planes in Q1 than it did in the prior-year period, and said 737 MAX production and deliveries continue to increase. BA Stock | News | BOEING Stock Price Today - Markets Insider Today, the stock was off 15% in early morning trading, to a low of $156. Making the world smarter, happier, and richer. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Image source: Boeing. Please. Remarkably, interest expense as a percentage of sales has jumped from 0.25% to 4.2% since 2019. #1, because the Treasury yield-curve inversion of late 2022 has a nearly perfect track record forecasting recession within 12 months. Boeing Stock Price Falls, Erases $11 Billion in 2 Days on 737 Max Halt Cost basis and return based on previous market day close. On Wednesday morning, Boeing (BA -0.24%) reported yet another quarter marred by one-time charges and delays on new programs. As of April 2023, he was ranked in the Top 5% of bloggers by TipRanks for stock picking performance on positions held one year.A contrarian stock picking style, along with daily algorithm analysis of fundamental and technical data have been developed into a system for finding stocks, named the Victory Formation. Supply/demand imbalances signaled by specific stock price and volume movements are a critical part of this formula for success.