Boeing stock price forecast: rating downgrade as woes mount

Boeing (NYSE: BA) stock price has come under pressure in the past few weeks as concerns about the company’s business remain. The stock peaked at $242.90 in August and then pulled back by over 20% to the current $193. 

Boeing, the biggest plane maker in the world, has faced numerous headwinds in the past few years. In 2019, the company stuffed a major issue after a plane belonging to Ethiopian Airlines crashed. This forced the company to ground all its Boeing 737 Max planes causing billions of dollars in losses.

Being has never recovered since the crisis even after the company received many orders recently. According to the WSJ, the number of 737 MAX jets delivered to customers crashed to the lowest level in more than 2 years. Boeing also discovered issues with Boeing Dreamliner.

Boeing’s troubles stem from challenges from its key suppliers. For example, the company identified holes on the fuselages manufactured by Spirit AeroSystems. Spirit blamed its suppliers for the issue. As a result, output of the Boeing 737 MAX has dropped by more than half to just 38 per month. It made just 22 planes in September.

Boeing 737 MAX is the company’s best-selling plane. And in a recent statement, the company’s CEO predicted that the company would deliver between 400 and 450 planes to customers this year. 

Boeing’s woes have benefited Airbus, its primary rival. In a report on Tuesday, Airbus said that it delivered 55 planes in September, bringing the total to date to 488. Boeing has only delivered 371 planes. Airbus has also overtaken Boeing in total backlog. 

There is a likelihood that Boeing’s business will continue slowing down in the coming months as it deals with the fuselage issue. Analysts also expect Boeing to downgrade its forward guidance when it publishes its results.

Boeing’s results in the second quarter showed that its revenue jumped to $19.75 billion while its net loss came in at $149 million. 

The daily chart shows that the BA stock price has been in a strong bearish trend in the past few weeks. It retreated and retested the important support level at $194.48, the lowest swing in March and May. 

This price was also the lower side of the horizontal channel. The stock has also formed a death cross pattern, which is usually a bearish sign. It has moved below the Ichimoku cloud indicator. Therefore, I suspect that the stock will continue falling as sellers target the next psychological level at $180.

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