Does Boeing Stock's Recent Nosedive Present A Good Entry Point For Investors?

Amid ongoing challenges, Boeing Co BA finds itself in a predicament following the latest incident, raising concerns about the company’s quality assurance processes. However, widespread disruptions to delivery operations seem unlikely. For those not updated on the incident:

• Over 170 Boeing 737 Max 9s Grounded, As Alaska Air Passengers Recall Terrifying Incident
• Boeing 737 Max 9 Groundings Trigger Stock Turbulence For Carriers As Regulators Order Safety Checks
• Boeing Faces ‘Reputational Minefield’ After Midair Door Blowout: 4 Analysts On Collateral Damage From 737 MAX 9 Grounding
• Boeing CEO Says Company Needs To Acknowledge ‘Mistake’ As 737 Max 9s Remain Grounded

The timing of this event couldn’t be worse for Boeing. The company had already been grappling with a series of setbacks, including quality issues in its supply chain, resulting in a downward revision of delivery targets for the Boeing 737 MAX. Moreover, recent mandatory inspections for loose bolts in critical components further highlight the existing challenges Boeing faces, compounded by similar issues at Spirit AeroSystems, its key partner.

This incident arrives at a crucial juncture, as Boeing seeks waivers for certifications on its MAX 7 and MAX 10 models. Although unrelated in nature, this occurrence intensifies pressure on aviation regulators, potentially impacting Boeing’s certification waivers.

Despite expecting limited widespread impact, the consecutive problems faced by Boeing appear to have triggered profit-taking from those invested in the company’s stock. The recent uptrend in Boeing’s shares from $177 price level in October 2023 to $264 in mid-December, representing an almost 50% increase, may have prompted investors to capitalize on profits.

The stock has fallen from its recent peak of $264 to about $229, marking a 13% decrease in less than a month. While short-term fluctuations in the stock price are likely, the overall effect on 2024 deliveries appears limited. This dip in stock prices might offer an attractive opportunity for long-term investors to enter the market.

Technical indicators on the price chart for Boeing stock also reflect a silver lining.

The chart above shows that the 50-day SMA crossed over the 200-day SMA for Boeing stock on Dec. 19, 2023. A Golden Cross, such as that made above, is considered a bullish indicator for stocks.

Now Read: Boeing To Revise 737 Max 9 Inspection Guidelines Post Mid-Flight Panel Failure: US Aviation Watchdog

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