Sign InBoeing Stock Faces Pressure Amid Production Headwinds and Negative EPS
Summary
On June 22, 2023, The Boeing Company's stock price decreased by 3.05% to close at $205.61, facing ongoing headwinds with a negative EPS and high PE ratio, but with potential upside based on discounted cash flow valuation and stable technical indicators, analysts recommend a 'Hold' approach until the company resolves its operational issues.
Financial Analysis:
The Boeing Company (BA), with a market capitalization of $123.69 billion, saw its stock price decrease by 3.05% to close at $205.61 on June 22, 2023. The stock traded between a low of $203.66 and a high of $208.50 during the day's trading session, and recorded a volume of 6.59 million shares, above the average volume of 5.45 million shares per day. The stock currently trades at a price-to-earnings (PE) ratio of -29.58, with a negative earnings per share (EPS) of -6.95.
Technical Analysis:
BA's Relative Strength Index (RSI14) of 47 indicates that the stock is neither overbought nor oversold. The stock is trading below its 50-day moving average of $207.15, but is above the 200-day moving average of $187.35, suggesting the stock may currently be in a consolidation phase. The moving average convergence divergence (MACD) of 5.39 also signals indecision and potential for further direction clarification.
Fundamental Analysis:
The Boeing Company faces ongoing headwinds, as reflected in recent news such as the strike at Spirit AeroSystems, one of its key suppliers. This development is likely to impact BA's production capabilities in the short term, adding to existing pressure. The negative EPS and a high PE ratio indicate that BA faces challenges in terms of profitability and growth potential.
Price Targets:
The discounted cash flow (DCF) valuation for BA is $230.18, suggesting potential upside from the current stock price. Analysts have a target high of $298, a target low of $175, a consensus target of $230.26, and a median target of $225, demonstrating a balanced outlook.
Stock Predictions:
For the next trading day, June 23, 2023, it is anticipated that BA will remain under pressure, potentially re-testing the day's low of $203.66 or staying within the trading range of $203.66 to $208.50. Based on the technical and fundamental analysis, as well as current price targets, a prediction for the upcoming week suggests potential consolidation, with the possibility of remaining near the 50-day moving average of $207.15.
Final Evaluation:
Considering the various aspects analyzed, it is recommended to categorize The Boeing Company as a 'Hold.' The stock faces significant challenges due to ongoing supply chain issues and negative earnings, but potential upside based on the DCF analysis and stable technical indicators suggest potential for future growth. The 'Hold' recommendation reflects market uncertainties and advises a cautious approach until the company presents a clearer growth prospect and resolves operational issues.
