Boeing hit its all time high back in March 1st, 2019, coming in at $440.62 per share. Just shortly a year later, Boeing hit its all time low at $95.01 per share. If you’ve been following the news, you know that the coronavirus fear had impacted and hurt the stock market pretty badly within the last month. Dow Jones ($DJI) hit its all time low of 18,590 points.
Right now, Boeing is valued at $141 per share (As of April 14 2020).
I’m not going to lie, but I did fuck up big time when I wasn’t able to buy $BA at $95 per share. I thought back then $BA would have a slight chance of dropping again. My potential entry point for $BA was supposed to be at around $85-$90 per share. Welp, now that $BA has slightly picked itself back up, it is still down over 50% from where it used to be back in January 2020.
If you got in at around $95, then congratulations. I personally think that is a very good entry price to get in.
If you weren’t able to get in around $95 and are still debating if it is a good purchase now, the answer is no. Let me tell you why.
One of the first thing that many people assume that once a stock reaches its all time low, it’s a great time to buy in. Of course that assumption can either go one or two ways. It has personally went well for me with $TSLA and $RCL. However, seeing that Boeing is $200 away from being back where it was, I don’t think it’ll be back where it was anytime soon.
During the past couple months, Boeing has had a couple of problems with their planes. Specifically their 737 model. The Boeing 737 has had 2 crashes within a couple of years, one occurring back in October 2018 and one recently back in March 2019. With 2 Boeing 737 plane crashing within 5 months apart, Boeing doesn’t look too good in this position. At the end of 2019, Boeing CEO Dennis Muilenburg was fired from Boeing after the two 737 plane crashes. Earlier this year, Boeing halted productions for the 737. Following up to the production halt, Boeing reported that it had cancelled 75 Boeing 737 planes due to the coronavirus epidemic, now totaling up to a total of 150 cancellations.
With their popular model being cancelled in production and the ongoing coronavirus epidemic, I personally don’t think that Boeing will recover anytime soon. Cancellation of planes can lead to a negative earnings for the following quarter. In the first quarter, Boeing only delivered 50 airplanes. Compared to the first quarter of 2019, they delivered 149 airplanes. That is a staggering difference. Even if the coronavirus epidemic is finally over, many consumers will still have the fear of traveling, leading to a decline in commercial flight demand. No one is going to travel within the next couple of years.