The recent decline in Boeing (NYSE:BA) stock has been a cause for concern among investors and industry experts alike, prompting closer scrutiny of the various factors weighing on the stock. Against this backdrop, the sale of shares by a congressman has emerged as a focal point, raising questions about the timing of the sale. It also prompts the question of whether Boeing's stock decline will extend further.
Boeing woes
Boeing's shares have declined due to a series of manufacturing mishaps and safety concerns, which have raised questions about the company's commitment to quality and safety standards. These concerns have extended to crucial Boeing planes, such as the 737 Max and the 787 Dreamliner, indicating potential systemic problems that have drawn the attention of regulators and lawmakers. Boeing shares are down 28% in 2024. In January, an incident occurred on an Alaska Airlines Boeing 737 jet, where part of its fuselage blew out mid-flight.
Things haven’t got better for Boeing, with the Wall Street Journal reporting Friday that Boeing has told airlines to check the cockpit seats in 787 Dreamliner jets after it was found that a seat in the cockpit of a Latam flight may have been behind the aircraft’s sudden nosedive.
These manufacturing and safety issues have not only resulted in production delays and regulator scrutiny but have also triggered a significant loss of confidence in the company's practices, contributing to the decline in Boeing's shares.
Congressman sells Boeing shares
With Boeing shares under pressure, it was recently revealed that Representative Bill Keating has sold shares of Boeing.
According to the Capitol Trades website, Keating sold $1,000 to $15,000 in Boeing shares on February 28. He also sold Boeing corporate bonds valued between $15,000 and $50,000 on February 8.
The trades have come under the spotlight in recent days, with various accounts on X (formerly Twitter) questioning the timing of the share sale.
Boeing stock forecast
In a recent note, analysts at Wolfe Research lowered the price target on Boeing to $260 from $270 per share, maintaining an Outperform rating on the stock. The firm said it sees a potential 40% upside in the stock.
While the firm noted that the stock’s price weakness reflects the attention and uncertainty following the blown-out door plug on Alaska Airlines flight AS1282 at the beginning of January, it cited Boeing’s “strong cash flow growth profile” as a reason for its bullishness on the stock.
Meanwhile, in early February, UBS lowered Boeing's price target to $275 but maintained a Buy rating on the stock, saying it sees “the pullback in shares as a buying opportunity for investors willing to focus on the medium term.”
On the other hand, in January, analysts at BofA cut Boeing to Neutral following the Alaska Airlines incident. They said at the time that “Boeing has again found itself in the spotlight of materially increased regulatory scrutiny.”
The bank stated, “The subsequent grounding and FAA-mandated production rate freeze at current levels will likely prevent Boeing from reaching its 2025/2026 production, delivery, and FCF goals outlined during its 2022 investor day.”