Down 27% In A Month, Will Boeing Stock See Even Lower Levels?

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BA: The Boeing Company logo
BA
The Boeing Company

Boeing stock (NYSE: BA) has fallen 27% in a month, while it’s down 39% YTD. Much of this fall came after the company reported downbeat Q1 results earlier this month. The company reported an 8% y-o-y decline in sales, and its loss widened. Both – commercial airplanes, and defense and space businesses – saw lower sales compared to the prior-year quarter. Furthermore, recently the stock came under pressure after a media report on a delay of six to eight weeks due to supply chain disruptions and labor issues from jet engine maker CFM International surfaced. [1]

Boeing needs to ramp up its deliveries, which fell to 35 in April from the 41 jets it handed over in March, and investors are concerned about ramping up the jet deliveries in the near future. BA stock got some respite in yesterday’s trading session. The stock rose 5% after it brought the Starliner space capsule safely back to Earth, raising optimism for its space business among investors.

Now that BA has seen a fall of 27% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a slightly higher chance of a fall for BA stock over the next month. It’s uncommon for BA stock to fall at this pace.  Of 23 instances in the last ten years that BA stock saw a twenty-one-day fall of 27% or more, only 11 resulted in BA stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 11 out of 23, or about a 48% chance of a rise in BA stock over the next month. See our analysis of Boeing Stock Chance of Rise for more details.

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Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years’ data

  • After moving -3% or more over five days, the stock rose on 56% of the occasions in the next five days.
  • After moving -6% or more over ten days, the stock rose on 57% of the occasions in the next ten days.
  • After moving -27% or more over a twenty-one-day period, the stock rose on 48% of the occasions in the next twenty-one days.

This pattern suggests a slightly higher chance of a rise in BA stock over the next five days and the next ten days, but it may see lower levels over the next month.

Boeing (BA) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: LMT highest at 3.0%; BA lowest at -2.8%
  • Ten-Day Return: NOC highest at 4.7%; BA lowest at -5.7%
  • Twenty-One Day Return: NOC highest at 5.7%; BA lowest at -26.9%

While BA stock may see lower levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Honeywell vs. NiSource.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 BA Return -14% -37% -18%
 S&P 500 Return -2% -15% 81%
 Trefis Multi-Strategy Portfolio -3% -19% 218%

[1] Month-to-date and year-to-date as of 5/27/2022
[2] Cumulative total returns since the end of 2016

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Notes:
  1. Supply chain, labor snags delay CFM jet engines, Tim Hepher, David Shepardson, and Eric M. Johnson, Reuters, May 24, 2022 []