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Boeing (NYSE: BA), the aerospace giant, is navigating a complex landscape of labor disputes and new orders as it strives to maintain its position in the global aviation market. Recent developments include a significant order from Emirates for cargo planes and a tentative agreement to end a costly worker strike, while the company’s stock performance reflects ongoing challenges.

Emirates Expands Boeing Freighter Fleet, Boeing’s Labor Dispute Nears Resolution

Emirates has placed an order for five Boeing 777F freighters, adding to a previous order of five earlier this year. The Dubai-based airline also extended leases on four 777Fs it currently operates and is considering future orders for either the Airbus A350F or Boeing’s new 777X freighter. This expansion reinforces the popularity of Boeing’s freighter offerings and aligns with the manufacturer’s forecast of demand for 2,845 new freighters over the next two decades. Emirates’ commitment to converting 10 passenger 777-300ERs into freighters further solidifies its long-term relationship with Boeing.

A strike by 33,000 U.S. factory workers, which began on September 13, 2024, has significantly impacted Boeing’s operations. The work stoppage has paralyzed production of key aircraft models and cost the company an estimated $1 billion per month. In response, Boeing has offered a new deal that includes a 35% pay raise over four years, a $7,000 signing bonus, and enhanced 401(k) contributions. Union members are set to vote on the proposal on October 23, 2024, though the deal does not include the restoration of a traditional pension plan, a key worker demand.

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Boeing Stock Gains in Premarket Amid Positive Developments

As of October 21, 2024, Boeing’s stock closed at $155.00, with pre-market trading indicating a 3.87% increase to $161.00. The company’s market capitalization stands at $95.515 billion, but its financial metrics reveal ongoing struggles. Boeing reported a negative EPS of $5.64 and lacks a trailing P/E ratio due to recent losses. The stock has significantly underperformed the S&P 500, with year-to-date returns of -40.54% compared to the index’s 22.95% gain.

Despite these challenges, analysts maintain a cautiously optimistic outlook. The average price target of $199.66 suggests potential upside, and recent “Buy” ratings from firms like Deutsche Bank indicate some confidence in Boeing’s recovery. However, with $12.6 billion in cash on hand and the threat of a credit rating downgrade to junk status by S&P Global Ratings, Boeing faces a critical period as it works to resolve labor issues and capitalize on new orders to regain financial stability.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.