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Despite a disastrous 2019, Boeing’s stock finished the year up 1%

Natasha Frost
Ethiopian Airlines Boeing 737 Max 8 (ET-AVM), the same type of aircraft that crashed in Ethiopia on 10 March 2019, is seen at Bole International Airport in Addis Ababa, Ethiopia, when it was first delivered to Ethiopia on 02 July 2018 (issued 10 March 2019). Ethiopian Airlines Boeing 737 en route to Nairobi, Kenya, crashed near Bishoftu, some 50km outside of the capital Addis Ababa, Ethiopia, on 10 March 2019. All passengers onboard the scheduled flight ET 302 carrying 149 passengers and 8 crew members, have died, the airlines says. Ethiopian Airlines plane en route from Addis Ababa to Nairobi crashed, Ethiopia - 02 Jul 2018

Boeing executives likely turned the final calendar page on 2019 with a sigh of relief. This was an annus horribilis for the company, during which it was responsible for the loss of hundreds of lives, hemorrhaged billions of dollars, and ended the year by firing its CEO, Dennis Muilenburg. It is no longer the world’s largest airplane manufacturer. Boeing’s flagship plane, the 737 Max, is still grounded, despite its many assurances it would be certified sky-worthy by the end of the year.

All things considered, then, Boeing’s stock isn’t doing all too badly. In fact, it ended the year with a gain of 1%. It may yet go even higher. Analysts seem to think a climb is imminent: Out of the 23 ratings tracked by FactSet, 48% encourage investors to “buy” and 52% to “hold.” No one is advising investors to sell. The average target price, meanwhile, is 18% higher than the current $325.76. If the analysts are correct, it seems as though the worst is past: The only way from here is up.

 

Still, things could be rosier. In the three months leading up to the second fatal 737 Max crash, on March 10, the stock rose precipitously, with strong orders from airlines driving production growth, before tumbling to around $378 in the wake of the disaster. It has since remained consistently below $400.

There’s every indication that the Boeing 737 Max will return to service sometime this year, which could give the stock a comfortable bump. But whether or not passengers will feel comfortable to fly in it is another matter, and one that could spell trouble for the rehabilitated plane—and its manufacturer.

 

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