Is Now the Time to Invest in Boeing?

After a year of setbacks, company stock has taken off

Aaron Schnoor


Image by Krzystof Kowalik on Unsplash

It’s been a tough year for Boeing.

The aviation giant, which employs over 153,000 people around the globe, made headlines in October of 2018 when a Boeing 737 MAX crashed in Indonesia. The accident, which killed all 189 passengers, was deemed to have been caused by a design flaw in the plane’s Maneuvering Characteristics Augmentation System (MCAS). In March of 2019, a Boeing 737 MAX crashed in Ethiopia, killing the 157 people on board. Once again, it was determined that the MCAS led to the accident.

The two deadly crashes led to the grounding of all Boeing 737 MAX planes, which dented the company’s stock price and lowered consumer loyalty. And that, unfortunately, was only the beginning of problems that plagued the aircraft producer. Boeing was unable to meet deadlines on a contract to produce the KC-46 tanker for the U.S. Air Force; then, in December, the company’s unmanned Starliner capsule made headlines when it was unable to reach orbit to dock with the International Space Station. To make matters worse, travel shutdowns caused by COVID-19 have lowered company stock even further.

It’s an understatement to say that Boeing has merely been impacted by these events. The company has made drastic plans to reduce employment levels and trim off inefficient production lines. In late May of 2020, Boeing laid off nearly 7,000 workers, with plans to lay off 9,000 more.

All of this sounds like the company is in deep water. But as of early June, 2020, investor sentiment surrounding Boeing is positive. Stock prices are surging, leading a bull market that is rebounding with unprecedented strength. Is this merely a fluke? Or is Boeing actually returning to its original dominance, making this the perfect time to invest in the company?

A fundamental and technical analysis may provide an answer:

Fundamental Analysis

  • Boeing (ticker symbol BA) reported a first quarter loss of $1.70 per share, which was far better than the predicted losses. To put that number in comparison, Q1 for Boeing in 2019 saw a gain of $3.16 per share.
  • Revenue has seen a 6% contraction over the past…