Boeing’s stock has faced persistent weakness for various reasons, prompting investors to seek guidance on when the downturn might bottom out. On Thursday, shares closed down 0.7% at $173.36, marking a new 52-week low. This decline followed a previous day’s close below $175, the first time since November 2022, illustrating the stock’s ongoing downward trend.
The downward pressure on Boeing’s stock has been ongoing since the occurrence of an emergency door plug blowout on a 737 MAX 9 jet operated by Alaska Air on January 5. This incident triggered increased scrutiny from the Federal Aviation Administration (FAA) and resulted in slower production of MAX jets, impacting several airlines’ capacity expansion plans.
Thursday’s weakness in Boeing’s stock may be attributed to a Wall Street Journal report revealing that Boeing CEO Dave Calhoun had taken private trips on corporate jets. Boeing disclosed $514,285 for Calhoun’s plane use as part of “all other compensation” in its 2024 proxy statement filed on April 5.
In response to queries, Boeing referred to the 2024 proxy statement, which detailed expense classifications. Calhoun’s total compensation in 2023 amounted to nearly $33 million, making it the highest annual pay for any Boeing CEO this century.
Additionally, BofA Securities analyst Ron Epstein reduced his price target for Boeing stock to $190 per share from $210, while maintaining his Hold rating. Epstein’s research report also addressed governance issues, highlighting structural changes to compensation detailed in the 2024 proxy statement.
Despite these disclosures, Boeing faces challenges such as ongoing investigations into the manufacturing quality of its 787 Dreamliner jets by the FAA. Moreover, the company has yet to appoint a new CEO after announcing in March that Calhoun would step down at the end of 2024.
Boeing’s stock is currently trading below its 50-, 100-, and 200-day moving averages, which typically represent support levels for a stock. However, with these levels breached, the stock is now testing a confluence of four support lines. If it fails to hold at these levels, investors may look to the 2022 range between $130 and $150 per share as potential support levels.
While continued declines are concerning, there’s a silver lining in the form of oversold conditions, indicating that much of the negative news may already be priced into the stock. This oversold condition could potentially lead to a bounce in the stock price. However, in the long term, Boeing will need to focus on improving quality and increasing production to drive a sustained recovery in its stock price.