The Boeing Company (NYSE: BA) shares have weakened from their recent highs above $250, and the current price stands around $219. Ronald Epstein, an analyst from Bank of America, warned it might take Boeing longer than investors realize to fix the company’s underlying problems.
Fundamental analysis: Boeing plane orders topped cancellations in July for the sixth straight month
Boeing’s size will always attract potential investors; still, the stock’s current price does not reflect the company’s fundamental background. Ronald Epstein, an analyst from Bank of America, said this week that Boing faces some serious problems, such as the latest problem with the vehicle’s propulsion system valves could delay the launch of Starliner into next year.
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Boeing does not yet know what caused the valves to remain closed, and the space capsule likely will need to be removed from the top of a rocket for repairs. There are also problems with the 737 MAX, and the company struggles with 787 productions after inspectors found multiple issues.
According to Ronald Epstein, until Boeing can prove its culture has changed, the Bank of America will not positively view this company.
“We are concerned it may take Boeing years to fully recover from problems that appear to be stemming from a culture of poor management, a lack of governance oversight, and dis-investment in engineering,†said Ronald Epstein, an analyst from Bank of America.
Boeing plane orders topped cancellations in July for the sixth straight month as the company took orders for 31 planes in July against 17 cancellations. The battle against the coronavirus is still not over, and if the situation gets worse, the demand for new planes will certainly fall even more.
The Delta variant of the coronavirus continues to pose downside risks together with further new variants, especially ones that might not be stopped by existing vaccines.
Boeing reported better than expected second-quarter results in July; still, Dave Calhoun, CEO of Boeing, predicted that airlines around the world would be ready to ramp up international travel by the second half of 2022. Nobody still doesn’t know when normal demand will return, while Boeing’s management indicated that production rates wouldn’t return to 2011 levels until early 2023.
Technical analysis: Boeing shares have weakened more than 15% from their recent highs
Boeing shares have found strong support above $200, but the Covid-19 pandemic continues to impact its business. Boeing’s business will be affected by the pandemic certainly all this year, and probably it is not the right moment for having Boeing shares in your portfolio.
Boeing shares have weakened more than 15% from their recent highs registered in June, and if the price falls below $200 support, it would be a strong “sell†signal. On the other side, if the price jumps above $240, it would be a signal to buy shares, and the next target could be around $250.
Summary
The Delta variant of the coronavirus continues to pose downside risks, and Boeing plane orders topped cancellations in July for the sixth straight month. This week, Ronald Epstein, an analyst from Bank of America, said that Boing faces some serious problems, and probably it is not the right moment to have Boeing shares in your portfolio.
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