Arlington, VA - Boeing Co (NYSE:BA), the aerospace giant, is facing a labor strike initiated by the International Association of Machinists and Aerospace Workers (IAM) District 751. The strike, which began on Thursday, involves more than 30,000 employees who are primarily based in Washington state.
The company disclosed this development in a Form 8-K filing with the Securities and Exchange Commission (SEC) on Friday, September 13, 2024. This filing comes after the employees voted on September 12, 2024, to commence the strike action.
Boeing, headquartered in Arlington, Virginia, is known for its extensive range of commercial jetliners, defense, space, and security systems. The strike is expected to impact the company's manufacturing operations, although the extent of the disruption has not been detailed in the filing.
The labor strike comes at a critical time for Boeing, which has faced various challenges in recent years, including setbacks with its 737 MAX aircraft. The IAM represents a significant portion of Boeing's workforce, and their decision to strike underlines the ongoing negotiations and disputes between the company and its unionized workers.
Boeing's stock, which is listed on the New York Stock Exchange, may see investor reaction to this news in the coming days as markets assess the potential implications for the company's production schedule and financial performance.
In other recent news, Boeing has been experiencing significant operational and financial challenges due to an ongoing labor strike. Over 30,000 union members have rejected a proposed four-year contract, leading to a halt in airplane production at Boeing's Seattle and Portland facilities. This has caused CFRA to adjust Boeing's 12-month price target and maintain a Sell rating on the shares.
Fitch Ratings and S&P Global Ratings have also expressed concern that the duration of the strike could lead to a downgrade in Boeing's credit rating. BofA Securities, Wolfe Research, and Jefferies, however, have maintained their respective Neutral, Outperform, and Buy ratings on Boeing, despite the potential impact of the strike.
The strike's outcome could have substantial implications for Boeing's financial health, with a potential cost of between $3 billion to $3.5 billion in cash flow if the strike lasts 50 days, according to a pre-vote note from TD Cowen.
InvestingPro Insights
As Boeing Co (NYSE:BA) grapples with the recent labor strike, it is essential for investors to consider the company's financial health and market position. According to InvestingPro data, Boeing has a market capitalization of $96.81 billion and is experiencing a negative revenue growth of 0.07% over the last twelve months as of Q2 2024. This financial picture is further complicated by a negative P/E ratio of -27.93, indicating that the market currently does not expect earnings to cover the stock price.
From the perspective of InvestingPro Tips, it is noteworthy that Boeing is a prominent player in the Aerospace & Defense industry, yet it suffers from weak gross profit margins, which are reported to be at 10.46%. Additionally, the company's stock price has been quite volatile and is trading near its 52-week low. This may signal caution for investors, especially since analysts do not anticipate the company will be profitable this year, and Boeing is not paying dividends to shareholders.
For those looking to delve deeper into Boeing's financials and market potential, InvestingPro offers additional insights and tips, which can be found on their dedicated Boeing page. As of now, there are 9 additional InvestingPro Tips available for investors who seek a more comprehensive analysis to inform their investment decisions.
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