Boeing Share Price Forecast January 2022 – Time to Buy BA?

Shares of American multinational corporation Boeing (NYSE: BA) are in the green today after closing at $207.86 as of January 3^rd (19:59 EST). Boeing has delivered commercial jets at a very slow pace in 2021, in spite of airlines rebuilding their fleets this year. While deliveries for the companies have increased in the last quarter, it still falls short of Airbus’ results. Experts believe Boeing’s low delivery total will likely lead to another quarter of weak financial results for the company.

Boeing – Technical Analysis

Boeing’s financial statement indicates that its market cap is at $122.159 billion with total assets worth $146.846 billion. Revenue for 2020 was at $58.16 billion with a profit margin of -20.41% compared to $76.56 billion in 2019.

 

Oscillators such as Relative Strength Index (14)(54.49),  Stochastic %K (14, 3, 3)(76.90), Commodity Channel Index (20)(84.74),  Average Directional Index (14)(14.99) and Awesome Oscillator(−0.53) are neutral.  On the other hand, moving averages such as Exponential Moving Average (10)(202.74), Simple Moving Average (10)(201.88), Exponential Moving Average (20)(202.69), Simple Moving Average (20)(201.44) and Exponential Moving Average (30)(204.07) are indicating a buy action.

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Recent Developments

Boeing has not performed well during the last two years. It delivered only 77 commercial jets in the first quarter of 2021, compared to a Q1 peak of 184 deliveries in 2018. In the second quarter, the company delivered only 79 commercial aircraft. It did not improve in the third quarter, where Boeing delivered 85 commercial jets.

The company’s product mix weakened sequentially. As Boeing was forced to halt deliveries of the 787 Dreamliner for the entire last quarter, it managed to deliver just 19 wide-body jets last quarter, down from 29 in the second quarter. While the company handed over more commercial jets last quarter than in Q2, the revenue was less due to the small amount of wide-body jets sold.

The demand for Boeing’s commercial jets has been crushed due to the 737 MAX grounding and the COVID-19 pandemic since 2019. However, the company has been successful in producing freighters. The demand for freighters have increased due to supply chain bottlenecks. This combined a sharp reduction in long-haul passenger flights, which can carry a meaningful amount of belly cargo. But the delivery in the freighter market and the level of order activity doesn’t look sustainable.

Boeing got another hit recently when the company discovered a new quality issue affecting the 787 Dreamliner, where certain titanium parts used in production since 2018 may be weaker than they are supposed to be. The issue can result in a delay in the resumption of Dreamliner deliveries to November at best. It seems likely that Boeing will end up with even more undelivered 787s in its inventory this year than the roughly 80 it had at the beginning of the year.

Should You Buy BA Shares?

Analysts were surprised by Boeing’s profit in the second quarter. Following a flurry of multibillion-dollar quarterly cash outflow, the company’s cash flow also slowed down to $705 million.

However, the upcoming Boeing earnings report might get affected badly by the continued slow pace of jet deliveries and the outright halt in 787 Dreamliner handovers. Boeing has also postponed a planned test flight for its Starliner space capsule in August due to a problem with its fuel valves. Boeing’s deliveries of military aircraft declined compared to the first two quarters of 2021. Investors are better off waiting for current quarter results before they invest in the company.

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