Boeing stock was lower again on Thursday after falling 7.5% on Wednesday.
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Wall Street is fed up with Boeing ’s earnings misses. Analysts are taking it out on their price targets for the stock.
Boeing (ticker: BA) reported a $2.75 per-share first-quarter loss on Wednesday. Analysts were expecting a 25-cent loss. It was the ninth time in the past 12 quarters that Boeing has missed estimates.
Analysts don’t appear happy with that trend. At least five have cut their target prices for Boeing stock, although none have changed their ratings on the shares.
Baird analyst Peter Arment cut his price target to $245 from $306 a share, saying the “story lacks clarity” in a Thursday report. He wants more clarity about, well, everything: expenses related to defense contracts, delays to the 787 and 777X, and recertification of the MAX jet in China.
Boeing stock was down about 1.4% at $152.33 in early trading. Shares dropped 7.5% Wednesday. The S&P 500 and Dow Jones Industrial Average were up about 0.8% and 0.4%, respectively.
Boeing took more than $1 billion in charges for two fixed-price defense contracts in the first quarter. The 787 jet isn’t being delivered currently because the Federal Aviation Administration is investigating quality issues. The newest version of the 777 jet is delayed from late 2023 to 2025. And China’s Covid lockdowns might be affecting that country’s recertification of the MAX jet. .
The MAX was grounded worldwide from March 2019 until November 2020 following two deadly crashes inside of five months. The plane is back in the skies, carrying passengers, all round the world, but China still hasn’t given permission for it to carry passengers.
Arment still rates shares Buy. So does J.P. Morgan analyst Seth Seifman, who cut his target for the price as well. It went to $190 a share from $235.
“The path to upside for Boeing stock is simple in theory but more challengingin practice,” wrote Seifman Thursday. Boeing needs to deliver more MAX jets and restart deliveries of 787 jets.
Susquehanna, Wells Fargo , and Bernstein also cut their price targets by an average of 15%. The average of those three analysts’ calls went to $208 from $244 a share.
Cowen analyst Cai von Rumohr and Melius analyst Robert Spingarn were two that didn’t change their targets.
Both rate shares Buy, though neither was impressed by the results. Spingarn wrote Wednesday it was “an ugly quarter, even by Boeing’s standard.” Von Rumohr was a little more positive, writing that the quarter was a “deck clearing” and that he believes cash flow can improve through the rest of 2022.
His price target is $230 a share. Spingarn’s is $256. Overall, the average call on the price among almost 30 analysts covering Boeing went to about $243 from $254 a share.
Analysts are still positive, overall. Three-quarters rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.
“There is still a long term growth story here,” Edward Jones analyst Jeff Windau told Barron’s Wednesday. There will be more people on planes in the future, which is positive for demand. Boeing just needs to clean up its operations.
Windau rates shares Buy, but he doesn’t have price targets for his stocks. That looks smart today.
Write to Al Root at [email protected]
