July 1st 2020 - TechRobotica - “The recent COVID19 crisis saw BA stock come crashing down below $100. On top of that, a string of issues like drop in demand and Boeing 737 MAX crisis make us wonder "Are the best days of BA over"? "
Boeing stock is currently challenged by three forces : the COVID19 situation, the recent Boeing 737 MAX crisis and the severe drop in demand due to travel restrictions and lockdowns all over the workd. As a result, BA faces significant pressure on free ca
These unprecedented string of challenges have significantly reduced economic activity resulting in major cash flow issues. With revolving credit facilities, cash/cash equivalents, and maximum loan leverage would amount to nearly $33B in cash, still indica
However, positive COVID-19 sentiment could trigger a recovery in share prices, but fundamentals provide a challenging base for share price appreciation.
With all these negativities in the air, the question arises "Are the best days of Boeing over?"
Absolutely not! According to me, Boeing is too big a brand to just "die". Moreover, major portion of US defense budget goes to Boeing. In other words, I dont think I would like to bet against the US economy since US defense earnings plays a major factor
So, here is my prediction. BA stock will come back to $400 before 2020 end!
Based on my analysis, BA would just need to survive this recent crisis, and its survival tactic during the COVID19 situation could be summarized by just one word.. "delay"
To delay the debt repayment as much as possible till life returns back to normal after the COVID19 crisis. Terminating an agreement to acquire a $4.2B stake in Embraers commercial aircraft is one such step. Also, government-backed loans would certainly a
To conclude, just hold on to your Boing positions and I am sure BA stock will come back to $400 before 2020 end.
As you can see in techRoboticas BI chart, BAs stock price is currently down by over 60% from its all time high. Taking into account this major price correction and the above analysis, it is not the time to dump this stock.
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