Boeing Company (BA) shares are taking a hit on Tuesday, driven by concerns surrounding the impending expiration of the company’s contract with the International Association of Machinists (IAM). This could potentially lead to a strike by the union, which represents roughly 20% of Boeing’s workforce.
The current contract is set to expire at 11:59 p.m. on September 12th. According to a Barron’s report, negotiations between Boeing and the IAM have been ongoing for over three weeks, but the two sides remain far apart on key issues such as wages, retirement benefits, and healthcare. The IAM has proposed wage increases of 40% over three years, which would cost Boeing an additional $1.5 billion annually. This hefty demand comes at a challenging time for Boeing, which is already grappling with reduced production levels and mounting debt following a serious incident in January 2024 where a Boeing aircraft’s door panel blew off during flight.
Adding to the pressure on Boeing, Wells Fargo analyst Matthew Akers downgraded the stock from Equal-Weight to Underweight, further fueling investor worries. Akers also reduced the price target from $185 to $119. This downgrade reflects the potential impact of the strike and Boeing’s current financial situation. Benzinga Pro data shows that Boeing shares are down nearly 40% year-to-date.
While the immediate outlook for Boeing appears uncertain due to the looming strike and analyst downgrade, Wall Street analysts remain relatively optimistic about the company’s long-term prospects. The average 12-month price target for Boeing sits at $207.10, suggesting potential upside from current levels. However, it’s important to note that stock prices can fluctuate significantly, and there’s no guarantee of future performance. The stock market’s average annual return is approximately 10%, while Boeing is currently down 39.1% year-to-date.
To gain a deeper understanding of Boeing’s financial position, recent events, and analyst sentiment, it’s recommended to consult resources such as Benzinga Pro, which offers in-depth analysis and tools for investors.
