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The Boeing Company is one of the largest aerospace and defense companies in the world. The brand name is well-known throughout the world and the company generates billions of dollars in revenue each year. Despite Boeing’s seemingly impenetrable status, the company’s finances, and consequently its stock performance, have suffered throughout the past few years.
The Covid-19 pandemic and low demand for international flights, coupled with ongoing operational issues plaguing its flagship 737 MAX, severely damaged the company’s bottom line - leading to annual losses for the first time since going public in 1978.
Despite the fact that unreliable stock performance is characteristic of the aerospace and airline industries, Boeing’s recent woes have been a topic of contention for some time now.
"We do have an incredibly ambitious and impactful mission as a company: Protect, connect, explore the world and beyond." - Dave Calhoun
But what could this mean for existing and future Boeing shareholders and can the company turn the situation around in time to avoid further losses? While it is hard to say for certain, beginner investors are advised to acquaint themselves with the basics of the company to understand what to make of the stock at present and where it could be headed in the future.
Boeing’s stock has endured some difficult periods since the 737 MAX incidents in 2019, which was quickly followed by the Covid-19 pandemic and lockdown measures were enforced around the world - severely impacting the demand for domestic and international flights and thus, reducing the demand for Boeing’s aircraft. This caused Boeing to be burdened by a massive inventory of depreciating aircraft. These factors, coupled with fierce competition from Airbus, led to Boeing ending the 2019 fiscal year with a loss, which was something Boeing’s existing shareholder base was not accustomed to seeing.
While Boeing has managed to claw its way back from the below $100 lows of 2020, the stock has yet to even come close to reaching its 2018-19 performance levels.
However, Boeing’s current financials have shown some improvement YoY, with the Q4 2022 report showing:
While Boeing’s short-term financials leave a lot to be desired, the company has managed to reduce the pressure on its bottom line and could be on the right track to eventually regain profitability in the long run.
Prospective investors should look at the potential advantages and disadvantages of investing in Boeing stock before putting their money at risk. While Boeing’s financial position might not be ideal, the company still has a lot going for it, and looking at both sides of the coin is important in order to make the right decision.
The Boeing Company has had a difficult time since 2019 and its stock has reflected those difficulties. After the 737 MAX crashes and the Covid-19 pandemic, the stock seems to have slowly rediscovered its momentum once again.
As of April 2023, Boeing does not pay dividends as a measure to save cash for operational purposes, as the company has incurred substantial losses over the 2019-2022 fiscal years.
Boeing has slowly managed to cover some lost ground. However, the company is still operating at a loss and does not pay dividends, which is a major issue for some investors. Despite this, many investors are still hopeful of a Boeing turnaround in the near future.