Boeing continues to strengthen its position in the global aviation market with new deals and efforts to resolve labor disputes.
Emirates Expands Freighter Fleet
The UAE-based airline Emirates has placed an order for five additional Boeing 777F freighters, adding to a previous order of five earlier this year. Additionally, the company has extended leases on four 777Fs and is considering future orders for either the Airbus A350F or Boeing’s new 777X freighter. This move underscores the ongoing demand for Boeing's freighter aircraft and aligns with the company's forecast for 2,845 new freighters over the next two decades. The conversion of ten passenger 777-300ERs into freighters further solidifies Emirates’ long-term relationship with Boeing.
Resolution of Labor Dispute
A strike by 33,000 US factory workers, which began on September 13, 2024, has significantly impacted Boeing's production, costing over $1 billion per month. To resolve the dispute, Boeing has offered a new deal including a 35% pay raise over four years, a $7,000 signing bonus, and enhanced 401(k) contributions. Union members are set to vote on the proposal on October 23, 2024, although the deal does not include the reinstatement of a traditional pension plan, which remains a key worker demand.
Boeing Stock Rises and Financial Outlook
As of October 21, 2024, Boeing's stock closed at $155.00, with pre-market trading showing a 3.87% increase to $161.00. The company's market capitalization stands at $95.515 billion, but financial metrics reveal ongoing struggles. Boeing reported a negative EPS of $5.64 and lacks a trailing P/E ratio due to recent losses. Despite these challenges, analysts maintain a cautiously optimistic outlook, with an average price target of $199.66 suggesting potential upside. However, with $12.6 billion in cash on hand and the threat of a credit rating downgrade to junk status by S&P Global Ratings, Boeing faces critical challenges in resolving labor issues and capitalizing on new orders to regain financial stability.
Boeing actively seeks solutions to improve its market position by securing new orders and resolving labor disputes, despite financial challenges.