Aerospace firm Boeing (BA) is alleged to be “unready for federal mediation.” That is the assessment made by the union, currently on strike, as it reports back on how the negotiations are going so far. Apparently, the answer is “not very well at all.” Boeing shares were up fractionally in Thursday afternoon’s trading, but near the 52-week low set of September 16.
Recent reports, according to The Guardian, note that Boeing was “unprepared,” after the first round of talks broke down. And the latest round of talks have “…gotten off to a poor start.” The talks have already gone to a federal mediator, but Boeing seemed either unable or unwilling to address two key points of contention: wages and pension.
Further reports suggest that Boeing may have larger problems even without the strike. It reportedly is having a hard time finding workers to begin with, let alone keeping the ones it has on the payroll. Boeing’s cost-cutting measures have not helped the appeal of working for the aerospace manufacturer, with rising healthcare costs, wages that have lost pace with inflation, and employees who have lost pensions.
Resolution Soon, Hopes Buttigieg
Meanwhile, with a presidential election just weeks away, this is another black eye for the Biden Administration, and Transportation Secretary Pete Buttigieg is out doing damage control. He is “optimistic” for a quick resolution, reports note. He was quoted as saying, “I do believe that both parties want to get to a resolution here, and hoping to see one that makes sense for the workers and it works for a company that really needs to find its way forward on so many fronts.”
Indeed, a swift resolution is best for Boeing here. With reports estimating that the strike is costing Boeing somewhere around $100 million per day, getting back to work is key to prevent Boeing from hemorrhaging even more cash. One thing left in Boeing’s favor is that it still has very few close competitors. That could possibly change as firms eyeing Boeing’s problems and massive backlog of orders wonder if they can take advantage.
Is Boeing a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, four Holds and two Sell ratings assigned in the past three months, as indicated by the graphic below. After a 23.2% loss in its share price over the past year, the average BA price target of $213.95 per share implies 37.77% upside potential.
