(Bloomberg) — What was supposed to be a comeback year for Boeing Co. turned into its worst stock market plunge since 2008, and if Wall Street is right, the planemaker’s shares may have only a modest recovery in reserve in 2025. .
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The stock is down 35% this year, putting it among the 20 biggest decliners in the S&P 500. Shares have stabilized over the past month, but investors remain cautious. They point to the series of crises in 2024 that have shaken their confidence in Boeing’s prospects and the risk that the company will suffer if trade frictions escalate again under President-elect Donald Trump’s presidency.
“Just staying out of the news would be a win for Boeing at this point,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund.
By 2024, the company appeared to be emerging from the aftermath of two fatal crashes of its planes in 2018 and 2019 and the collapse of global travel during the pandemic. Boeing took a big step toward thawing its tense relations with China, plane orders rose and stocks hit their highest level in nearly two years. Wall Street was extremely optimistic, without a single sell recommendation on the stock.
Things began to unravel in January, when a Boeing plane’s door plug exploded mid-air during an Alaska Air flight. Then there was public outcry and scrutiny of Boeing’s corporate practices and culture, a management overhaul leading to the departure of the CEO, serious allegations from whistleblowers, a debilitating strike and a massive cash burn that the company expects will continue into 2025.
The chain of events dented Wall Street’s earnings expectations. Twelve months ago, analysts on average expected Boeing to earn $4.18 per share this year, following four straight annual losses, according to data compiled by Bloomberg. They now anticipate a loss of $15.89 per share, the worst since 2020. At the same time, estimates for 2025, 2026 and 2027 have collapsed by about 50% or more from last year’s levels .
All of which explains why analysts have little expectation that the recent rally in the plane maker’s shares will extend much further. Their 12-month average price target suggests upside potential of around 7% from Friday’s close of $169.65.
Boeing, based in Arlington, Virginia, declined to comment.
One of the biggest concerns heading into 2025 is that the company’s sprawling global supply chain leaves it exposed if Trump follows through on his tariff proposals. Boeing, alongside U.S. industrial giants like Caterpillar Inc. and Deere & Co., is widely seen as being on the front lines of any trade war that could result.
