Boeing Company NYSE: B.S 2024 has come off a rough year as it has faced regulatory issues, poor public relations, regulatory scrutiny from the Federal Aviation Administration (FAA) and National Transportation Safety Board (NTSB), and a workers’ strike that cost the company billions of dollars. The aerospace leader started 2024 well, trading at $250.15 before a series of unfortunate events sent shares crashing to two-year lows when they fell to $137.03 on November 14, 2024.
Boeing has a new CEO in aerospace veteran Kelly Ortberg, formerly of Rockwell Collins, while reporting a quarter of the kitchen sink to set the bar low. The stock has since risen again to $180.72, helping it trim its losses to just over 30% for the year. Here are four reasons why Boeing is a comeback story for 2025.
1) The bad news is behind us, and expectations are low as 2025 approaches
The end of a strike by 33,000 machinists on Nov. 4, 2024, helped end costly production shutdowns of Boeing’s 737, 777 and 767 aircraft from its factories in Everett and Renton in Seattle. The closure cost Boeing an estimated $5.5 billion in profits, bringing the company’s losses to more than $6 billion in its third-quarter 2024 earnings report. This prompted Boeing to raise more than $20 billion in cash and implement a workforce reduction of 10%, resulting in the elimination of 17,000 jobs.
On December 17, 2024, Boeing Commercial Airplanes CEO Stephanie Pope announced that all production lines were back in operation, saying: “We have taken the time to ensure all of our colleagues on the manufacturing team are trained and certified while keeping inventory at optimal levels to ensure smooth operation.” work.”
The increase is expected to be gradual until 2025. The company is rumored to be targeting production of its 737 MAX aircraft at 37 aircraft per month by May 2025. While the company insists on systematically increasing production, critics fear this could happen again. Repeating past mistakes, trying to over-build aircraft to meet deadlines. Public perception and reputation will be crucial moving forward as the company cannot afford to make any more mistakes.
2) Boeing’s backlog continues to exceed half a trillion dollars
Boeing stock forecast today
$190.11
7.40% upModerate purchase
Based on 24 analyst ratings
| High expectations | $250.00 |
|---|---|
| Average expectations | $190.11 |
| Low expectations | $85.00 |
Boeing stock forecast details
Even during the strike, Boeing had a backlog of more than 6,200 aircraft, with a total value of more than half a trillion dollars. As the only American game in town, most of its customers had to grin and endure delays in deliveries, hoping for an end to the strike. Some of its largest orders come from Southwest Airlines New York Stock Exchange: LOVE With 432 aircraft. Delta Airlines New York Stock Exchange: Dwaiting on 100 planes, Emirates Airlines waiting on 240 planes; and United Airlines Holdings Company Nasdaq: UAL Waiting for 497 planes.
The deals keep coming. On December 19, 2024, China Airlines announced the split of orders worth $12 billion between Boeing and Airbus. The airline has ordered 10 Boeing 777-9s and four 777-8 freighters as well as 10 Airbus A350-1000s from rival Airbus. On 19 December 2024, Pegasus Airlines also announced a potential $18 billion order for up to 200 Boeing 737 MAX 10 aircraft, consisting of 100 firm orders and an option to purchase another 100 aircraft. These are the largest aircraft in the 737 MAX line. This is the largest aircraft purchase agreement for the Turkish low-cost airline, which it granted to Boeing at the expense of Airbus.
3) Lower oil prices could boost airline margins and increase orders for Boeing
The most expensive operating costs for an airline are labor and fuel costs. Unlike labor, fuel prices can fluctuate significantly based on many factors, impacting margins and profits. While airlines can partially hedge against volatility, they are always exposed to oil price changes.
Fuel prices affect airlines’ financial planning and forecasts. When prices are low, margins expand, enabling airlines to budget for fleet enhancement and expansion. The Trump administration plans to increase oil supplies while lifting fracking and drilling restrictions across federal lands, adopting Trump’s “baby drilling” theme to dramatically increase oil and gas production, thus lowering fuel prices.
4) BA stock triggers a head and shoulders reversal breakout
The head and shoulders pattern consists of three peaks connected by the neckline on bounces. The first peak is called the left shoulder followed by a dip and bounce that forms the neckline. The second and highest peak is the head, which dips down and bounces back at the neckline to form the right shoulder, which is the final lower peak.
Connecting the retracement levels in a horizontal line forms the neckline. A breakout occurs when a stock breaks below the neckline. A reversal occurs if the stock bounces off the neck after rising through the top of the right shoulder.
BA formed a left shoulder high at $243.10, a head high at $167.54, and a right shoulder high at $196.95. Shares fell again to retest the neckline, hitting lows of $137.03, but rose again to 180.72. The right shoulder overlaps the firm daily VWAP at $185.98, which is the breakout level if BA can rise and stay above this level. The daily RSI is slowly rising at the 77 range. Fibonacci (Pullback support levels are at $171.16, $159.32, $142.46, and $132.43.
Actionable options strategies: Bullish investors could consider using cash-secured sell-offs at Fibonacci retracement support levels to buy the dip. If the stock is set, writing the covered call at rising Fibonacci levels implements the wheel strategy for income since there are no profits.
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