Boeing stock price has moderated a bit to around $200 as investors assess the impact of the recent Air India crash. It was trading at $201 on Tuesday, down from the year-to-date high of $218. This price is about 56% above the lowest point this year.
Air India plane crash to have limited impact on Boeing
Boeing stock price crashed last week after an aircraft traveling from India to the UK crashed shortly after its take-off, killing 270 people.
This crash brought memories of the recent Boeing accidents, including the December 2018 Jeju Air crash and the Ethiopian Airlines crash.
Boeing stock price crashed as investors predicted that the new crash would present a new crisis to the company.
However, there are signs that this crash will not lead to a crisis for the company. For one, Boeing 787 Dreamliner has one of the best safety track records in the industry.
The plane was delivered to Air India in 2013, meaning that the accident could have been due to maintenance issues.
Therefore, it is likely that the company will resume the uptrend it has been at in the past few months.
Read more: Air India crash: airline ordered to inspect Boeing 787 fleet; probe on engine thrust
Boeing is making progress
There are signs that Boeing’s business is recovering well, as the company will likely not be blamed for the Jeju Air and Air India plane crashes.
First, Boeing has started receiving orders from airlines. Some of these companies are opting for Boeing because of its smaller order book compared to Airbus, which has a backlog of over 8,000 planes.
As such, a company that orders a Boeing today will likely receive it earlier than those who order from Airbus.
Companies are also opting for Boeing because of its safety record. While the company’s planes have had accidents recently, the reality is that it has affected a tiny number. Also, its aircraft, like 747, 777, and 787 have a solid safety record.
Qatar Airways recently ordered 210 widebody planes, while AviLease ordered 737 Max jets. China Airlines ordered Boeing 777x passenger and freighter planes.
Boeing is also undergoing a turnaround led by Kelly Ortberg, who has prioritized improving safety and its profitability.
Boeing revenue growth
The most recent results showed that Boeing’s revenue rose by 18% to $19.49 billion, while its operating margin rose to 2.4%.
Most importantly, it narrowed its loss from over $355 million in the first quarter of 2024 to $31 million. Ortberg said:
“We continue to execute our plan, are seeing early positive results, and remain committed to making the fundamental changes needed to fully recover the company’s performance while navigating the current environment.”
The company has also improved its balance sheet, ending the quarter with over $23.7 billion. It reduced its debt to $53.6 billion and has access to credit lines worth over $10 billion.
Therefore, these numbers and the upcoming 737 ramp-up mean that the company will continue growing this year.
Boeing stock price analysis
The daily chart shows that the BA share price bottomed at $129.13 in April and peaked at $218 earlier this month. This rebound mirrors the performance of other companies and US indices.
Boeing stock price peaked at the 61.8% Fibonacci Retracement level, which explains why it has pulled back.
The stock formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other.
Therefore, the Boeing stock price will likely rebound and point to more gains, potentially to the 78.6% retracement level at $238. This view will be confirmed if the stock rises above the key resistance point at $218.
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