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Boeing: How will future strikes affect an injured giant

  • Writer: Anders Forslund
    Anders Forslund
  • Mar 31
  • 2 min read

Updated: Apr 29



I assign Boeing (BA) a Hold rating with a price target of $151.85, implying a 3% downside from its current price of $156. Boeing has faced intense public scrutiny over the past several years following two major 737 MAX crashes in 2018 and 2019, which occurred just five months apart, and more recently, after a panel blew off a 737 MAX 9 during Alaska Airlines Flight 1282 in January 2024. These high-profile incidents have significantly damaged the company's reputation and raised concerns about its manufacturing practices and safety culture.

Amid these ongoing challenges, Boeing is undergoing a major leadership transition. Kelly Ortberg, former CEO of Raytheon Technologies, will replace David Calhoun, who is stepping down as CEO later this year. The leadership change comes at a critical juncture: the FAA has capped Boeing's production of its most important aircraft, the 737 MAX, at 38 units per month as part of intensified regulatory oversight. Meanwhile, labor tensions have escalated sharply. A Lynwood Times survey revealed an overwhelming 80% "no" vote against Boeing’s latest contract proposal, following a unanimous strike authorization vote by the International Association of Machinists (IAM).

While Boeing's long-term backlog and global defense footprint provide some resilience, ongoing operational, regulatory, and labor risks downside potential in the near term. In this context, I recommend holding the stock as the company navigates through a period of substantial transition and risk

Boeing now faces the risk of an imminent machinists’ strike, which would mirror the labor actions seen recently in the auto industry and in Boeing's own history. To assess the potential financial impact, I use a comparative analysis that draws on the 2008 Boeing strike, the 2023 United Auto Workers (UAW) strike, and the specifics of Boeing’s current financial position and labor dynamics. We incorporate these factors into a discounted cash flow (DCF) framework to model a best-case negotiation scenario and a downside strike scenario, ultimately informing the hold recommendation.





 
 
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