Boeing Stock Has Shaky Post-Earnings History

BA is down 14% in 2022

Apr 25, 2022 at 10:57 AM
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Boeing Co (NYSE:BA) steps into the earnings confessional reports first quarter earnings before the open on later this week, on Wednesday, April 27. Ahead of the event, BA is down 1.3% to trade at $174.80 today. Amid a brutal April broad market selloff, should investors look to the blue chip as a post-earnings winner for Wednesday?

Looking at Boeing's post-earnings history, only two of the last eight reports have ended in positive territory. Back in January, BA logged a post-earnings loss of 4.8%. For Wednesday, the options market is pricing in a post-earnings move of 7.9%, much larger than the average post-earnings move of 3.6% in the last two years.

Boeing stock is off by 14% in 2022, and is dangerously close to its March 8 two-year bottom of $167.58. Along the channel of lower lows carved out in recent months, the shares' 50-day moving average has contained major breakouts. Analysts and short sellers remain undeterred though; there are no "sells" on the books, while less than 2% of BA's total available float is sold short.

BA Chart

Nonetheless, Boeing stock has decent potential as a recovery play over the next couple of years. Although BA’s valuation metrics are still on the higher end, with a forward price-earnings ratio of 51.02 and a price-sales ratio of 1.72, the aviation company is estimated grow significantly by fiscal 2023. For fiscal 2022, Boeing is expected to return to profitability with average estimates placing their earnings at $2.89, which would mark an increase of $12.33.

Boeing is also estimated to finish fiscal 2022 with 28.6% revenue growth. In addition, the company is expected to grow earnings 155.4% and revenues 19.1% for fiscal 2023. However, the aerospace business still carries a high amount of risk as an investment due to Boeing's weak balance sheet, which carries $16.24 billion in cash and $59.64 in total debt.


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