Boeing Co. (NYSE: BA) saw shares fall 6.8% last Thursday to $108.44 after reports of a U.S. Securities and Exchange Commission (SEC) accounting probe on its big jets. Then its shares closed up only 0.2% at $108.63 on Friday, when the broad market was up much stronger. Reports of an investigation by the SEC over Boeing’s accounting have added more losses on top of what was already a double-digit decline so far this year.
So, the 2016 Boeing bullish and bearish outlook is not panning out at all the way things looked at the end of 2015 and the start of 2016. In fact, shares are down well over 20%. Boeing came into 2016 as one of the highest weightings in the Dow, with its shares well over $100. It was also valued at close to 15 times expected 2016 earnings, and its stock already sported a 2.5% yield.
Its shares rose 14% in 2015, but the year-end price of $144.59 came with a consensus price target of $163.78. That already has gone far lower, and it will be even lower in the coming days and weeks when the new lower analyst targets get factored in. The most bearish price target was last seen at $102.00, up $1.00 from the end of the 2015 lowest target price.
One driving force remains Boeing’s record $400 billion or so in backlog. This has grown from prior years, but emerging and international markets continuing to slow could result in orders getting canceled or pushed out. It turns out that weaker global growth, along with a combination of low commodities and crazy oil and energy prices, just don’t bode well for companies who try to sell overseas when there is also a strong dollar.
24/7 Wall St. wanted to see how analysts on Wall Street are viewing this. It may be very important because Boeing has been one of the bull market darlings of Dow, and there have been great expectations with that massive backlog for future orders ahead.
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