Key Stats for Boeing Stock
- Price change for Boeing stock in last 6 months: -19%
- $BA Stock Price as of Oct. 23: $188
- 52-Week High: $254
- $BA Stock Price Target: $267
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What Happened?
A fight between Boeing (BA) and a small Florida supplier has stopped 777 freighter production for nearly two months.
Reuters reports the dispute has also disrupted the 767, including freighters and KC-46 tankers.
The supplier is Vaero, and Boeing’s August complaint says Vaero stopped delivering a wing part called the trailing-edge rib kit.
Boeing called the part “indispensable” and said Vaero was the only supplier. The halt impacted the Everett, Washington, wing plant and the complaint said the delay was costing Boeing as much as $6.5 million a day.
The two sides settled in late September. But three Boeing workers told Reuters that 777 freighter production still has not restarted.
Boeing has pulled two partly built freighters off the final assembly line and one of them was reportedly headed to FedEx.
Boeing is now trying to make the part in-house.
The 777X is not affected because it uses composite wings. Boeing has delivered 21 777 freighters this year and a few more with wings built before the dispute could still ship by year-end.
Boeing declined to comment and Vaero did not respond.
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What the Market Is Telling Us About Boeing Stock
This story shows how one supplier can stall a whole program, which matters for Boeing stock because the company is trying to ramp output.
The latest earnings call gives context. This was in July, before the dispute began. Boeing delivered 171 airplanes in Q2, its best quarter since 2018.
Revenue was $24.6 billion, up 8%, and the backlog stood at a record $715 billion.
Management said it expects free cash flow of $1 billion to $3 billion this year. It also called the $10 billion free cash flow target “very attainable” in the years ahead, while free cash flow was $631 million in Q2.
Executives also said supply chain strength was a key part of the plan. The CEO said rate increases get harder above 52 airplanes a month, and this dispute is a reminder of that risk.
The freighter problem touches only part of the business. The 737 was ramping to 47 a month, and the 787 was steady at 8 a month.
But Boeing stock may stay sensitive to any news that slows deliveries, which will impact cash flow.
Investors in Boeing stock should watch when 777 freighter output restarts.
They should also watch whether Boeing can build the part itself, and they should look for any impact on deliveries in the next report.
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So what is Boeing stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
