Is Boeing Stock a Buy for 2024?

While Boeing (NYSE: BA) has felt the pain points of supply chain disruptions and declining traveler volumes, its issues extend beyond those two hurdles.

Highly publicized 737 crashes in 2018 and 2019 caused China to ban the company’s planes from the country’s skies. Because China accounted for so much of Boeing’s revenue, the stock plummeted. Then 2020 came along and the viability of Boeing as a going concern became a real topic of conversation.

Like many companies that saw a resurgence in 2023, Boeing shares had been on a gradual rise. But the 3rd quarter earnings report for the company wasn’t what investors expected and it sparked a sell-off, sending the stock to a 52-week low of around $176 per share in October. But by November the tide turned when word came out that China might lift the ban on the company’s flagship airplane, the 737 MAX.

Quickly, the stock soared above $260 per share, and BA is now up 33% year-to-date. However, there’s no word on how long it will take to for the company to realize revenue from China. And Boeing has struggled to meet the demands of its current workload. Indeed, it had to downgrade its production guidance for 2023 from 400-450 planes delivered to 375-400.

So is Boeing stock a buy for 2024?

What Made Boeing Stock Go Up?

Before the November rise, a number of issues were plaguing Boeing. The main cause of production delays was a manufacturing flaw in aft pressure bulkheads that Boeing received from one of its suppliers, Spirit AeroSystems.

The aft pressure bulkhead maintains pressure while a plane is at cruising altitude, and the ones Spirit delivered to Boeing had incorrectly drilled fastener holes. That caused a massive production delay as the company had to replace the defective units.

Boeing also faced costly delays in its Defense, Space, and Security segment. It agreed to produce two planes that will be used as Air Force One. In the third quarter, that project alone cost the company $482 million in research and development expenses. Another contract to produce satellites for defense clients cost Boeing $315 million.

But there were some positives out of the company’s 3rd quarter earnings call. Revenue of $18.1 billion represented a 13% improvement over the same quarter of last year. That was just above where analysts projected revenue would be. While the net loss of $1.6 billion was a nearly 50% improvement over where Boeing was last year, the loss was 10% greater than expected.

Will Boeing Stock Keep Gaining?

Even though revenue met expectations, it’s clear that the earnings release wasn’t the catalyst for the stock’s November gains. Instead, it was the report that China could be lifting its ban on Boeing’s 737 MAX.

Prior to the halt, China had accounted for about a third of the company’s revenue. However, fatal crashes in Indonesia and Ethiopia caused the country to ban the jet.

Boeing recently issued a report estimating that China alone will account for 20% of global air travel by 2042. So there’s no doubt that a return to the market would bode well for Boeing. There’s just no way of knowing exactly when that will happen.

There was more good news for the company in November when Boeing had a banner day at the Dubai Airshow. At the largest air show in the Middle East, Boeing locked in almost 300 orders, which could mean billions of dollars in revenue. Rival airplane builder Airbus was only able to obtain 86 orders at the same event.

Is Boeing Stock Going to Go Up?

According to 29 analysts, Boeing will not go up much more given that it is slightly overvalued by 3.7% with a price target of $258 per share.

Still, tremendous optimism for the company’s future revenues has spurred bullish momentum and, notably, among the Wall Street research analysts, there isn’t a single sell rating.

There are 25 buy ratings, including 4 analysts who believe the stock is poised to outperform the market. The highest forecast has Boeing shares jumping 21.6% to $320 per share over the next year.

While there isn’t a sell rating on the stock, the lowest forecast isn’t exactly promising. It has BA dropping 27.8% to $190.

Is Boeing Stock Undervalued?

Boeing’s recent gains are tied to news that won’t impact the company’s bottom line any time soon. That could be part of the reason why the analysts’s consensus isn’t higher at this point. While the company’s production delays should be resolved, there is still no guarantee of when Boeing will ramp up production.

However, the stock is currently trading at just 2x sales. That could be attractive to investors who believe that Boeing has seen the worst of its production woes, and is soon to turn it around. The analysts’ consensus price of $258 per share could look conservative for a stock that was trading around $350 pre-2020.

Boeing Stock: Buy or Sell for 2024?

Boeing is likely to face short-term volatility as the company continues to struggle with delayed production and losses from the defense sector. The company’s leadership has gone so far as to say they regretted taking on the Air Force One projects because of the increased time and expenditures they have caused.

Those projects will continue to drain Boeing’s resources in the near future. So while there is good cause for renewed optimism, the stock’s gains may be short-lived if the company comes in with another dismal earnings release in the 4th quarter.

Still, Boeing offers a unique opportunity for long-term investors should the company be allowed back into the Chinese market, and if it can continue to make headway in the Middle East.

Nonetheless, if it takes an extended amount of time for China to lift the Boeing ban, or if the country decides to reverse course, Boeing shares could be in for a hard time in 2024.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.