It has been a difficult 12 months for the Boeing Company (NYSE:BA), a number one manufacturer of economic jets and airplanes. The stock has plummeted some 24% 12 months up to now resulting from the corporate’s financial performance and a series of high-profile questions of safety with its planes.
Probably the most notable event occurred in January, when a door-plug panel flew off a Boeing 737 Max jet operated by Alaska Airlines in mid-flight. Amazingly, nobody was injured, and the plane landed safely. Nonetheless, this safety incident and others haven’t only rattled customers but in addition investors.
On Monday, Boeing stock was having a rare good day, jumping about 3% on the opening bell and ending the day up by around 1.4% at $191 per share. The explanation was an enormous shake-up in the chief suite, but will these changes solve Boeing’s problems?
Boeing CEO to step down
On Monday morning, the corporate announced that President and CEO Dave Calhoun, who took the helm in 2020, will leave at the tip of 2024. His departure follows a series of mishaps, including the recent panel blowout, which he called “a watershed moment for Boeing” in a letter to employees on Monday.
“It has been the best privilege of my life to serve in each roles, and I’ll only feel the journey has been properly accomplished after we finish the job that we want to do,” Calhoun wrote to employees. “We’re going to fix what isn’t working, and we’re going to get our company back on the track towards recovery and stability.”
Calhoun just isn’t the one moving piece. Stan Deal, CEO of Boeing Business Airplanes, is retiring effective immediately. Deal, who took the job in 2019, has been replaced by Stephanie Pope. Pope has been chief operating officer at Boeing since January, and before that she was CEO of Boeing Global Services.
The opposite change at the highest involves Board Chair Larry Kellner, who is not going to run for re-election on the upcoming annual meeting, Kellner has been on the board for 13 years, including in the course of the last five as chair. The board elected Steve Mollenkopf to succeed Kellner as chair when the brand new term starts.
Transitioning to a transition
Thus, while there are changes afoot, the largest one won’t occur until next 12 months, when the brand new CEO is about to take over. Within the meantime, Boeing has so much on its plate, including attempting to turn around its financial struggles, which resulted in a $30 million net loss within the fourth quarter and a $2.2 billion net loss in fiscal 2023. Those numbers were higher on a year-over-year basis, however the airplane manufacturer still has to proceed moving back toward profitability.
Boeing didn’t provide any guidance or outlook for 2024; as such, its year-end report may leave investors questioning what type of progress is being made.
This all comes at a time when the corporate is coping with an investigation by the National Transportation Safety Board (NTSB) into the Alaska Airlines accident. Further, Boeing is facing a mandate from the Federal Aviation Administration to develop an motion plan to deal with its “systemic quality-control issues to fulfill FAA’s non-negotiable safety standards.”
Thus, that is clearly a transition period for Boeing because it moves toward the installment of a latest president and CEO within the C-suite at the tip of the 12 months.
The consensus amongst analysts suggests Boeing is a buy with a median price goal of $260, which could be a 36% increase from the present price. The chief shakeup appeared to be received favorable by analysts and markets, but a few leading Wall Street firms did lower their price targets.
With the improving, yet still shaky financials, the chief upheaval, and the turmoil surrounding its many questions of safety, there are only too many balls within the air to recommend Boeing as a buy at once.
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