2020 has been very rough for most companies across the country. This is mostly due to the pandemic which has caused mass panic and record high unemployment rates. One particular industry that has suffered horribly is the aerospace industry. The Boeing Company is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product support services. It dominates the aerospace industry with over 80% of the industries sales coming from then and one other company. Boeing's stock price peaked at $440 in March of 2019 and has since dropped down to as low as $93 but has recovered to $213 as of today. They have suffered so much because of two main factors. One of them being that their 737 max plane had technical issues and caused two accidents killing everybody on board. The other reason being the pandemic stopping almost all flying across the world. As of just recently, they have just gotten their 737 max approved to be flown again by the government so this is a great start for them. On top of this the vaccine is soon to be released to the public so this is also very beneficial for them. I personally have a price target of $400 over the next 5 years for Boeing because I don't know for certain how long it will take for society to get comfortable with flying on planes again but I believe that over that 5 years is plenty of time to do so.
What do you all believe will happen with Boeing?
I think Boeing, having improved their 737 max plane, will see increases in the size other stock price. However, this will take time for people to have confidence in the plane and confidence in the safety of flying. Having flown recently back home, I noticed there was a pretty normal amount of people flying. There was no rule on having the middle seat open, and I believe airlines are allowing full capacity on flights. I think people still have the necessity to travel, and this should help Boeing in the end. It may take some time for them to return to normalcy though.
ReplyDeleteI think it would be interesting to look at their stock change after they announced they could fly the 737 again. I also think that Boeing would be a good investment because sooner or later people will be flying again and Boeing will be there when they finally are needed again.
ReplyDeleteI think Boeing's rebound will be a slow and gradual one, that lags the general economy. Airline and travel in general will see a sluggish recovery as it will be the last thing people are comfortable doing following the pandemic. I think a five year outlook for Boeing is appropriate but it is very difficult to valuate them currently. I think $400 is reasonable but I highly doubt it goes much higher than that. It saw resistance in the price range of 360-380 and it will take faith in the safety of their planes for them to break through that barrier again like they did in March 2019.
ReplyDeleteThe airline industry and the manufacturers in this sector have probably lived through the worst impact of the pandemic but the recovery will be a slow one. Boeing has dual challenges between the abrupt halt in airline travel and the reputational issues caused by the Max 737 but I think they will ultimately recover and patient investors will probably find Boeing stock to be a good buy over the long term.
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