BA Down 5.4% In A Month. How Confident Are You In The Stock?
Boeing (BA) stock is down 5.4% in 21 trading days. While history suggests price dips recover, there is risk – specific to profitability and downturn resilience. Consider the following data:
- Size: A $166 Bil company with $75 Bil in revenue currently trading at $219.99.
- Fundamentals: Last 12 month revenue growth of 2.4% and operating margin of -12.4%.
- Liquidity: Has Debt to Equity ratio of 0.32 and Cash to Assets ratio of 0.15
- Valuation: Currently trading at P/E multiple of -15.6 and P/EBIT multiple of -21.1
- Has returned (median) 44.2% within a year following sharp dips since 2010. See BA Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for BA, see Buy or Sell BA Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and BA drops another 20-30% to $153.99 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Boeing (BA) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: BA provides aerospace products and services, including commercial and military aircraft, satellites, missile defense, space systems, and financing solutions for equipment leases.
2022 Inflation Shock
- BA stock fell 57.0% from a high of $269.19 on 12 March 2021 to $115.86 on 13 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $264.27 on 17 December 2023 , and currently trades at $219.99
| BA | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -57.0% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- BA stock fell 72.7% from a high of $347.45 on 12 February 2020 to $95.01 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| BA | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -72.7% | -33.9% |
| Time to Full Recovery | Not Fully Recovered days | 148 days |
2018 Correction
- BA stock fell 27.3% from a high of $440.62 on 1 March 2019 to $320.42 on 14 August 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| BA | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -27.3% | -19.8% |
| Time to Full Recovery | Not Fully Recovered days | 120 days |
2008 Global Financial Crisis
- BA stock fell 72.6% from a high of $107.23 on 25 July 2007 to $29.36 on 3 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 18 July 2013
| BA | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -72.6% | -56.8% |
| Time to Full Recovery | 1598 days | 1480 days |
Worried that BA could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.