Boeing Co.’s shares continued their downward spiral on Wednesday, nearing their lowest levels in over a year, as the aerospace giant grappled with mounting concerns over safety controls.
Vertical Research Partners analyst Robert Stallard expressed the prevailing sentiment, noting, “Just when you thought things couldn’t get any worse at Boeing, they have.”
The stock declined by 2.4% during afternoon trading, marking a 9.9% plunge over an eight-session losing streak, the longest since September 13, 2023. This trajectory positioned the stock to close at its lowest price since November 2022.
The ongoing selloff followed reports on Tuesday that the Federal Aviation Administration (FAA) was investigating allegations made by a Boeing whistleblower regarding assembly and safety shortcuts with 787 aircraft. Senator Richard Blumenthal (D-CT) announced the examination of these allegations and requested outgoing CEO Dave Calhoun’s presence at a hearing scheduled for April 17.
Adding to the negative sentiment, Boeing reported its lowest quarterly aircraft deliveries in nearly three years on Tuesday, falling well below Wall Street expectations.
Stifel Nicolaus analyst Bert Subin acknowledged that while the delivery story might improve this year due to production issues rather than demand, the data didn’t alter the negative outlook for free cash flow. Despite maintaining a buy rating on the stock, Subin lowered his price target to $260 from $270, still suggesting approximately 50% upside potential from current levels.
Year to date, Boeing’s stock has plummeted by 33.3%, making it the worst-performing stock in the S&P 500 index. In contrast, the S&P 500 has gained 8.1% over the same period.
The broader implications of Boeing’s challenges extend beyond the company itself. They raise concerns about the integrity of safety controls within the aerospace industry, potentially denting consumer confidence in air travel and impacting related sectors such as tourism and aviation services. Moreover, the investigation by the FAA and the involvement of lawmakers highlight the gravity of the situation, indicating potential regulatory repercussions and legal proceedings that could further weigh on Boeing’s reputation and financial performance.