Boeing Stock Wiped Out 47% Of Investor Wealth Over The Last 5 Years Amid Multiple Issues — Now, This Expert Suggests A Breakup Could Benefit The Airplane Maker

The Edge founder Jim Osman is reportedly campaigning for a full breakup of planemaker Boeing Co BA.

What Happened: Osman told Barron’s that he would like to see Boeing split into its three main divisions of commercial aerospace, defense, and services.

According to Osman, shareholders are not going to wait forever for the company to start creating value. "It's time for Boeing 's management to wake up and start creating value. The clock is ticking on [management's] job security and shareholders aren't waiting forever," he said.

According to LinkedIn, Osman’s The Edge specializes in identifying “hidden corporate value.” According to him, there is a 100% upside in Boeing stock if the company undergoes a breakup.

Why It Matters: Boeing has been faced with one crisis after the other over the past few years, starting in late 2018 when a Boeing aircraft went down in the sea off the coast of Indonesia.

In January 2024, a door panel flew off an Alaska Airlines plane manufactured by Boeing, creating further concerns. The Covid-19 pandemic in the middle did not help the company’s financial constraints.

Boeing stock is down 47% over the past five years and by 14% over the past year, according to data from Benzinga Pro.

Boeing’s new CEO Kelly Ortberg, who took the reigns of the company in August, has since undertaken stringent measures including layoffs and raising capital to salvage its financials. There have been no announcements to date regarding a possible breakup.

In the third quarter between July and September, Boeing reported a core operating loss of $5,989 million, up from $1,089 million in the corresponding quarter a year ago. The Global Services segment was its sole profitable segment in the quarter, creating earnings from operations of $834 million.

The Commercial Airplanes and the Defense, Space, and Security segments incurred losses from operations of $4,021 million and $2,384 million, respectively, in the quarter.

Boeing has a consensus price target of $197.89, derived from the assessments of 22 analysts, tracked by Benzinga. Barclays, Deutsche Bank, and JP Morgan released their most recent ratings on Jan. 6, Jan. 2, and Nov. 25, respectively, collectively suggesting a 19.64% upside potential.

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