Annus Horribilis for Boeing
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It's been a rough start to the year:
SLS Launch Vehicle delayed, again - competitor SpaceX has been booking success after success with its Falcon launch vehicles
KC-135 Tanker deliveries halted, again - this contract was originally won by Airbus but Boeing make a big political stink over it and was given the contract. Fool me once?
Lion Air crash - the certification process Boeing uses is now being called into question.
Ethiopian Air crash - after Boeing said there was nothing to worry about following the Lion Air crash makes Boeing and all aspects of its safety and certification processes look suspect.
Starliner spacecraft delayed - competitor SpaceX's Dragon Crew spacecraft has booked a picture perfect test flight. Starliner was planned to fly before Dragon Crew, but kept getting delayed.
But the stock is still up ~120% in the past 2 years vs S&P500 up ~20%. Their CAGR is about average but ROI (up to now, at least) has been well above average.
Prior to the last 2 years, Boeing had tracked pretty closely with the S&P500. Recent events look to result in a permanent change in their relationship with regulators, adding to costs. They may have to accept lower margins to complete current orders if the catch phrase "If it's Boeing, I'm not going" takes hold.
So they're now having problems in their defense business, their launch vehicle business, their spacecraft business, and their commercial aviation business. Can they keep up their current high stock price, given that some of that bad news could impact sales and profits for a long time? |
